In Germany, Coinbase can operate legally

The German Federal Financial Supervisory Authority, or BaFin, has approved cryptocurrency exchange coinbase to operate a crypto-custody company in the country, the financial regulator announced on Monday.

The German parliament passed legislation in 2019 requiring companies that provide crypto-monetary custody services to apply for new licences or cease operations in the country. The new law went into effect on January 1, 2020, and it includes specific guidelines for companies that provide crypto-related services. While Coinbase is the first licenced company, the German newspaper Handelsblatt hopes that the new bill’s legal clarity will encourage more German banks to provide crypto-asset services.

According to BaFin, Coinbase’s German subsidiary will be the first to be licenced in Germany for the provision of crypto-custody services. Because this is a new business model, BaFin has formed an interdisciplinary cross-division team to monitor all crypto custody-related issues, according to a press release issued today.

Last year, German regulators passed legislation allowing companies to offer cryptocurrency custody services, but only with prior BaFin approval.

Source: Fox Business

Coinbase receives approval

Coinbase Germany receives approval two months after BaFin issued a warning about Binance’s offer of stock toks. Binance’s request to remove the warning was denied by the regulatory authority, citing German law prohibiting the sale of securities and other ‘investment products’ such as tokenised stock without prior approval.

Binance has recently received a second warning from the Japan Financial Services Agency for operating without registration (the exchange had been warned about operating without registering in 2018). Furthermore, Binance recently refused to provide crypto-derivatives to the Financial Conduct Authority of the United Kingdom. Binance no longer serves customers in Ontario, Canada, due to regulatory pressures.

It remains to be seen whether Binance’s lack of regulation will have a long-term impact on its operations. However, as cryptocurrency adoption grows, crypto service providers will need to tread carefully in order to avoid regulatory repercussions.

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