Bitcoin trading not subject to licensing

The Kammergericht (equivalent to the Higher Regional Court for Berlin) has ruled that trading Bitcoin (and then consequently all cryptocurrencies) is not a financial instrument in the sense of the KWG (German Banking Act).

On February 29, 2016, the Tiergarten District Court convicted the defendant of a “negligent violation under sec. 54 para. 1 No. 2, para. 2 KWG” and sentenced to a fine. On appeal by the defendant, the Berlin Regional Court acquitted the defendant on legal grounds.

Permission from the German Federal Financial Supervisory Authority (BaFin) is required in accordance with § 32 para. 1 sentence 1 of the German Banking Act (KWG), anyone who intends to conduct banking business or provide financial services in Germany on a commercial basis or to an extent that requires a commercially established business operation. A person who, inter alia, acquires and sells financial instruments in his own name for the account of a third party (financial commission business; section 1 (1) sentence 2 no. 4 of the KWG) is engaged in banking business. Financial services are provided by, among others, who brokers transactions on the acquisition and sale of financial instruments (investment brokerage; section 1 (1a) sentence 2 no. 1 KWG), acquires and sells financial instruments in the name of a third party for the account of a third party (contract brokerage; section 1 (1a) sentence 2 no. 2 KWG) or operates a multilateral system that brings together the interests of a large number of persons in the purchase and sale of financial instruments in a manner that results in a contract for the purchase of such financial instruments (operation of a multilateral trading facility; section 1 (1a) sentence 2 no. 1b KWG).

According to the KG, crytocurrencies should not require a license (Az.: (4) 161 Ss 28/18 (35/1)).

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.