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)).