Legislation on Bitcoin custody comes into force

In Germany, legislators have taken the EU Directive as an opportunity to subject companies offering a custody service for cryptocurrencies to extensive regulation.

The safekeeping, management and protection for others (cryptosafe custody) of cryptographic assets or private cryptographic keys that are used to hold, store or transfer cryptographic assets.All crypto exchanges which offer a custody service for their customers, i.e. provide a wallet, are therefore obliged to apply for a licence from the Federal Financial Supervisory Authority (BaFin). The custody service is thus defined as a new financial service.

For the purposes of this Act, a crypto asset is a digital representation of an asset which has not been issued or guaranteed by any central bank or public authority and which does not have the legal status of a currency or money, but which is accepted by natural or legal persons as a means of exchange or payment on the basis of an agreement or actual practice or which serves investment purposes and which can be transferred, stored and traded electronically.

Author : Jake Simmons