The Federal Financial Supervisory Authority (BaFin) in Germany is currently clarifying how the newly defined law can be applied to companies regarding the safekeeping of crypto-currencies. Companies that would be affected are one’s subject to foreign jurisdictions but serve the German market. In a guideline published in January, the regulatory authority announced that companies that have already held digital assets for Germans do not have to fear punishment for not having a license. For the time being, these companies will receive the same protection as companies based in Germany. Those intending to apply for a licence must do so by the end of March This means that these companies must announce their intention to apply for a licence by 31 March at the latest. They must then continue to apply for a licence until 30 November at the latest. For those crypto companies that have not kept any crypto-currencies for German customers before January 1st, but want to expand into the German market, this means that they will not be able to start their business until they receive the said license. Carola Rathke, Partner at Eversheds Sutherland Germany confirmed that nobody has the possibility to apply directly. Eversheds Sutherland is working directly with BaFin to enforce the law using so-called grandfathering mechanisms. Recommendation to submit the application well before the deadline Despite the deadline of November 30, Rathke emphasizes that crypto companies should apply long before November. By the deadline, only complete applications that do not leave any questions of the supervisory authority unanswered will be considered. The German law is a response to an anti-money laundering directive of the European Union, which requires crypto companies to comply with the extended Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) requirements. Problematic for companies newly entering the German market Companies that have not yet been entrusted with German financial supervision could face problems as a result of this process. Sven Hildebrant, head of the Distributed Ledger Consulting Group, is not enthusiastic about the new legislation: “A law is passed quickly, then it turns out to be not very clever and as soon as the law comes into force, an administrative practice will be established“. Furthermore, Hildebrant suspects that guidelines will appear within the next three to five weeks based on concrete applications. * Originally published in German at CVJ.ch