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ARTICLE · 01 NOVEMBER 2018

Game Changer For Cryptocurrency In Germany? Court Holds No License Required To Trade Bitcoins

Jones Day
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The defendant was prosecuted for operating a bitcoin trading platform without having obtained a license for providing investment services, which would be a criminal offense under the KWG if bitcoins were to qualify as financial instruments.

GermanyTechnology
Nick Wittek
Nick Wittek
Philippe Goutay
Philippe Goutay
Andrés Lorrio
Andrés Lorrio
Martin Schulte
Martin Schulte
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In Short

The Court Decision: On September 25, 2018, the Higher Regional Court of Berlin held that bitcoins would not qualify as financial instruments for the purposes of the German Banking Act (Kreditwesengesetz, "KWG"), thus dismissing the licensing requirement for bitcoin-related investment activities in Germany.

The German Regulator's View: The decision is in contrast to the position of the German regulator, the Federal Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, "BaFin")—that bitcoins qualify as financial instruments in the form of "units of account" (Rechnungseinheiten) and therefore related investment services or activities require a license under the KWG.

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