The German regulatory body BaFin has reportedly released a new paper, providing further clarity to the status of digital coins under freshly effective laws for 2020. 

Specifically, the paper has outlined details of “the new regulatory standards”, where companies are required to stay compliant with, if they are looking to operate crypto custody services. This will apply for all firms having customers’ digital assets in their possession, nominally exchanges, financial services or banks.

The new crypto regulation rolled out on the first day of 2020 is the next step of a larger plan for alignment, of German legislation with  the European Union’s Fifth Anti Money Laundering Directive (5AMLD). crypto-related firms are officially classified as financial services providers under Germany’s Banking Act, and will need to be greenlighted by BaFin for operation. 

The paper also provided an updated version of how crypto assets are viewed, which covered the use of tokens by payment and exchange. 

Particularly, security tokens will not be viewed as securities, under the German Securities Deposit Act. Nonetheless, if transferring and trading activities can be performed upon them, then the EU Prospectus Regulation will be applied. 

“Anyone who wants to conduct banking business or provide financial services in Germany on a professional basis or to an extent that requires a business operation set up in a commercial manner.” The leaflet clarified organizations eligible for securing the agency’s authorization.