30 Jun 2021 Marsha Tusk
Coinbase Received A German License
Proprietary trading and cryptocurrency custody services (Kryptoverwahrgeschäft) are now allowed for one of the world’s biggest crypto exchanges to date – Coinbase, through its German subsidiary, Coinbase Germany GmbH, according to Germany’s Federal Financial Supervisory Authority (BaFin).
“The BaFin has the Coinbase Germany GmbH granted permission on 28 June 2021 the Kryptoverwahrgeschäft and proprietary trading – to provide – limited to crypto values and units of account,” the announcement from the regulatory authority noted.
Effectively, Coinbase’s local subsidiary became the first crypto company to get BaFin’s first license to offer crypto-custody services in the country. “Coinbase Germany GmbH is, therefore, the owner of the first license issued by BaFin for the crypto custody business that was newly introduced as a financial service,” the announcement reads.
According to reports, Germany’s financial supervisor received over 40 applications from local banks, which are seeking authorization to custody Bitcoin. The list of banks includes Solarisbank, the first German bank to offer digital assets-based services.
However, BaFin noted that the new business model is based on the fourth EU Money Laundering Directive, ratified in 2015 and went into force on June 26, 2017. The Directive states that tax evasion and other serious fiscal offenses were added to the list of existing offenses, implementing an increased in reach Customer Due Diligence (CDD) model.
The crypto-custody regulatory model endured through extensive research and review in order to sufficiently deal with the tax complicity of the crypto market.
The license news came as a gift for Coinbase, which currently secured a valuation of around $56.67 billion after an initial NASDAQ listing with a valuation of nearly $100 billion on April 14, 2021.
Coinbase’s North-American influence continues to grow, as the exchange became a primary choice for crypto regulators in North America and Europe due to its strict adherence to regulatory guidelines.
The german license is the latest step in Coinbase’s expansion, as in 2018, Coinbase launched its crypto custody business with security, regulatory, and operational challenges posed by the cryptocurrency market in mind.Cryptocurrency exchange Coinbase Exchanges News Nasdaq cryptocurrencies exchange BaFin