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- All crypto firms operating in the German market have needed BaFin approval since January 2020
- Coinbase was the first crypto exchange to receive a license from BaFin, according to the regulator
- Coinbase’s stock has dropped below Nasdaq’s initial reference price of $250
All crypto firms operating in the German market have needed BaFin approval since January 2020. Coinbase’s German subsidiary has been granted a crypto custody business license by the Federal Financial Supervisory Authority. Coinbase Germany is the first company to be granted a license under the BaFin licensing framework, which is the first of its kind in the European Union.
Coinbase is the first company to be granted the permit
Germany’s Federal Financial Supervisory Authority, also known as BaFin, announced on Monday that it had granted Coinbase the country’s first crypto exchange license for custody digital assets. Due to the lack of precedent, the regulator said it would form an interdisciplinary, cross-divisional, and cross-departmental team to handle any crypto custody issues.
The Bundestag, Germany’s parliament, passed a law in November 2019 requiring firms of custody of crypto for Germans to apply for a crypto custody license or leave the country. Companies that were already operating in the country on Jan. 1, 2020, had to announce their intent to apply by March 31 and submit their applications by Nov. 30 of that year. According to Carola Rathke, a partner at Eversheds Sutherland, a German law firm that advised Coinbase on the project, Coinbase applied for the license in late spring 2020.
Coinbase’s expansion in Germany
Coinbase has been granted a license. Germany is a natural and exciting next step in Coinbase’s international expansion. Germany, the world’s fourth-largest economy by GDP, is the only EU country to have established a comprehensive regulatory framework for cryptocurrency exchanges. There is already a thriving blockchain scene in Germany, which is only second to the United States in terms of the number of Bitcoin nodes running.
In the coming weeks, Coinbase Germany will launch to better serve both new and existing German customers, including by localizing our service and expanding our product offering. To accomplish this, we are expanding our German customer support team and will soon launch new features and products.
Being awarded the license is the culmination of many months of hard work from the Coinbase team, in close collaboration with BaFin, according to Marcus Hughes, Coinbase’s Managing Director for Europe. They are excited to provide our German customers with a best-in-class crypto product offering as well as a secure, localized experience.
Coinbase is dedicated to providing the most secure and user-friendly crypto services to customers in Germany and around the world. Obtaining a license in Germany is a significant step forward in our efforts to promote economic freedom around the world.
Coinbase’s stock has fallen below Nasdaq’s initial reference price of $250 since going public in the United States with a direct listing. COIN is currently trading at $239.49, down roughly 30% from its April 14 high.
Investors are being warned by BaFin
Businesses that offer the exchange of virtual currencies for legal tender and vice versa, or for other cryptocurrencies, are considered financial institutions subject to regulation, according to BaFin’s notes on the aforementioned law. However, the regulatory body has previously warned potential investors that in the crypto space, there is little to no protection against losses for retail consumers, a warning BaFin reiterated in its announcement regarding Coinbase’s license.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
