Category Archives: German Federal Government

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Germany’s Only Regulated Crypto Exchange Acquires Major Trading Bank

Germany’s only regulated cryptocurrency exchange has announced the acquisition of Bank Tremmel Wertpapierhandelsbank GmbH.

The announcement by Bitcoin Group SE, the holding company behind Bitcoin.de, signals not only expanding its current trading services but also its potential to operate cryptocurrency ATMs in the country. Tremmel Bank is not only well connected with both domestic and foreign banks, but also insurance companies, asset managers and fund companies.

This places Bitcoin Group SE in an ideal position to begin offering crypto custodial services as part of an expanded service through its bank as well as expanding its cryptocurrency offerings. Tremmel’s competence in the trading of stocks, bonds, and other exchange products is sure to have been a driver in the acquisition.

The exact acquisition figure has not been revealed by Bitcoin Group SE although a press release put the amount “in the lower seven-digit euro range”. However, before the move can go ahead, Germany’s Federal Financial Supervisory Authority (BaFin) need to give final approval. As Bitcoin Group SE has acquired 100% of Tremmel, the accompanying banking license becomes another huge asset in terms of future plans to extend its crypto profile and associated services once the takeover is complete.

Earlier this year, the German Federal Government stated that cryptocurrencies do not pose a threat to financial stability. The government stated on 12 June that the volume of cryptocurrencies, when juxtaposed to the overall size of the German financial system, is comparatively low and, therefore, simply needs careful monitoring and regulatory measures put in place in order to control the space.

Recently, Germany’s second-largest stock exchange, Boerse Stuttgart, took the step to host Crypto Trading and Coin Offerings. The intention for Boerse Stuttgart is to keep everything under one roof where hosted ICO coins can be traded alongside leading cryptocurrencies such as BTC and ETH.

 

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UK Exchange Jumps the Gun On German Crypto Regulator

The German Federal Financial Supervisory Authority (BaFin) has closed down the operations of UK cryptocurrency exchange Finatex Ltd.

It appears that the UK firm was ordered to “cease cross-border proprietary trading immediately,” for slipping under Germany’s regulatory wire, having not received the necessary authorization to operate cross-border exchange transactions from BaFin. The UK company which was launched in Leeds, Yorkshire in 2016 has announced it plans to dissolve the company this week as a result.

This is not the first time that BaFin has stepped in to flex its regulatory muscles in recent months over the question of cryptocurrency exchanges’ rights to operate. The last attempt to prosecute a company trading Bitcoin operating without a license was, however, unsuccessful after The Berlin Court of Appeal overturned the case.

Inconsistencies in the way cryptocurrency firms can operate cross-border transactions in Europe have caused some concern recently, and the German case once again brought these to the notice of European financial regulators. Although individual EU countries have clearly defined rules in their own jurisdictions for the trading of Bitcoin and other digital currencies, the EU as a whole has so far failed to come together with a Europe-wide regulatory framework. The EU passed a motion in 2016 enabling taxation of cryptocurrency holdings, investments, and profits.

Now that the Berlin Court of Appeals has classified Bitcoin as a “financial instrument” it now comes under the auspices of BaFin’s financial regulatory practices. Its CEO Felix Hufeld only last month told investors that they should avoid ICOs due to scamming concerns. He argued:

“We do not want to stifle innovation, but must avert dangers at the same time. For example, it is important for us to take action against money laundering and safeguard the privacy rights of investors. In addition, there should be certain minimum standards for the underlying terms of the contract.”

Earlier this year, the German Federal Government stated that cryptocurrencies do not pose a threat to financial stability. The government stated on 12 June that the volume of cryptocurrencies, when juxtaposed to the overall size of the German financial system, is comparatively low and, therefore, simply needs careful monitoring and regulatory measures put in place in order to control the space.

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Crypto to Come Under Microscope at Vienna EU Talks

The EU is ready for its next round of talks with the 28 member states ready to discuss digital assets and whether further legislation is needed.

The next round is scheduled to be held in the Austrian capital Vienna on 7 September and is said to include certain issues surrounding cryptocurrencies such as money laundering, tax evasion and terrorist financing, all subjects which have been of concern to EU legislators over recent years.

It’s thought that the focus on money laundering, tax evasion and terrorist financing planned for Vienna has been motivated in part by concerns that EU laws don’t provide enough protection to investors, particularly in light of Asian moves to tighten regulation following hacking incidents this year. Also, the fact that unregulated exchanges fall outside of global financial regulations has caused some extra concern.

It should be acknowledged that while these concerns continue to dominate EU discussions, it has been noted by the both the European Commission and the International Monetary Fund (IMF) that both digital currencies and blockchain technology can bring great benefits to capital markets and commerce in general.

Regulators in Europe are also keen on harnessing the new technologies unleashed by digital currencies, according to the updated document. Initial coin offerings “have established an effective and efficient way to raise capital”, it said, adding that this development could also help integrate capital markets in the bloc.

French finance minister Bruno Le Maire recently described cryptocurrency as a “revolution”. Income tax on crypto has been axed by the French government and former French finance minister Christine Lagarde, now IMF head, described future international digital currency regulation as “inevitable”.

Lagarde said that not only could Bitcoin enable fast and inexpensive transactions but that the underlying technology behind cryptocurrencies, blockchain, could make financial markets safer.

Other states have made positive comments with the German federal government stating that cryptocurrencies don’t pose any threat to financial stability and the UK’s Financial Conduct Authority (FCA) announcing the launch of a collaborative entity, the Global Financial Innovation Network (GFIN).

An EU document obtained by Bloomberg says that ICOs “have established an effective and efficient way to raise capital”. The document reportedly also states that ICOs could help integrate capital markets in the EU.

 

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Germany Says Bitcoin No Threat to Financial Stability

The German Federal Government has stated that cryptocurrencies do not pose a threat to financial stability, reports Cointelegraph.

The government stated on 12 June that the volume of cryptocurrencies, when juxtaposed to the overall size of the German financial system, is comparatively low and, therefore, simply needs careful monitoring and regulatory measures put in place in order to control the space. This assessment is a view generally shared by the G20, of which Germany is a significant member state.

The statement was made in reaction to a parliamentary inquiry from the Euroskeptic right-wing Alternative for Germany Party who cited alleged problems including money laundering, illegal revenue, use of such currencies in online gambling and terrorist financing. It backs the government’s national risk analysis scheduled for next year. The government stated:

“In order to address the risks of Bitcoin and other “cryptocurrencies”, there are already important regulations in Germany: for example, German-based crypto traders must follow the same anti-money laundering regulations as other financial service providers – especially when it comes to identifying customers.”

Once again, the German government has expressed the necessity for careful international controls on cryptocurrency, noting that the Federal Financial Supervisory Authority (BaFin) will oversee any new legislation:

“… there is a need for coordinated action at European and international level. The Federal Government is, therefore, pressing for a harmonized handling of crypto-tokens at this both levels.”

The federal government’s current view reflects the recent International Monetary Fund (IMF) position on cryptocurrencies, which is that it also considers that cryptocurrency is no threat to global financial stability, providing that it is carefully monitored to protect users.

In March this year, IMF chief Christine Lagarde expressed positive outcomes for the crypto space, stating: “Just as a few technologies that emerged from the dot-com era have transformed our lives, the crypto assets that survive could have a significant impact on how we save, invest and pay our bills.”

Lagarde calls for an even-handed approach which will both exploit the benefits of the new technology and minimize the risks in using and trading cryptocurrency, clearly a view shared by German legislators.

 

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