The German market for financial services continues to develop. From this year the new money laundering law applies, with which the German government wants to regulate the business with cryptocurrencies. Now the big players are emerging from the crypto business and are seeking a license to trade and store cryptocurrency in Germany. Coinbase and co. The spectacle with Coinbase and its terms and conditions could finally take the fear away from many Germans.
Coinbase targets Germany
Germany has been implementing the 5th European Money Laundering Directive since the beginning of this year. As a result, cryptocurrency has been classified as a financial instrument and BaFin must therefore have permission to do business with cryptocurrencies. Companies that already did business with cryptocurrencies in Germany before the law can apply for a transition period until November 2020, but the application must be received by the end of March 2020.
One of the largest crypto exchanges, namely Coinbase, apparently has a serious interest in a license from BaFin in order to continue offering its services in Germany. Without such a license, Coinbase would have to stop operating this year. Companies have already been flushed out of the market that cannot or do not want to comply with the new money laundering directive. Bottle Pay had to stop the services because sending cryptocurrency via social media channels did not meet enough KYC requirements.
Coinbase manages over 30 million user accounts in over 100 countries and wants to remain constant in Germany. For this purpose, a necessary application has apparently already been submitted to BaFin, because Coinbase is now looking for a “Head of Compliance Germany” in Berlin to accompany the process of the application. This information can be found in the requirements profile via the advertised position of Coinbase at LinkedIn or on their own website.
Coinbase soon “legal” in Germany?
Coinbase is a popular focal point as a Fiat to crypto exchange. In addition, the platform fees are moderate. With Coinbase Earn, Coinbase also offers the opportunity to earn coins for free and not too little. Up to $ 166 in free coins are currently possible. This project is very popular with Bitcoin investors, so that newly added coins are sold out more and more quickly and you often end up on the waiting list. But there has been a little hack so far. Coinbase does not target its services to Germans. It used to be so specific in the terms and conditions:
The websites and the services offered by Coinbase are not addressed to persons who have their registered office or place of residence in Germany. Coinbase services are provided by Coinbase UK, Ltd., a UK entity. Coinbase UK, Ltd. is not a regulated financial services provider and does not operate outside the UK.
In the meantime, this sentence can no longer be found in the user agreement. Rather, it is said that you have to live in a country where Coinbase services are available. If you click on and look at the countries where Coinbase is available, Germany is not there.
In fact, many from Germany have long been using the services of Coinbase, even when it was clearly stipulated in the terms and conditions that the services are not aimed at people living in Germany. There were no consequences. But BaFin’s license will provide more security and trust, provided that it is issued at the end. Coinbase wants to step out of this gray area and become more attractive for German users.
Other big players want to defend their supremacy
Not only Coinbase, but also players like Binance and co. want to secure their position in Germany. Because the new law also allows banks to offer and keep cryptocurrency. This would make it possible for mainly banks to take over the cryptocurrency business in Germany. To counteract this, other large players will also have to follow suit. It can be assumed that companies like Binance will also submit an application for a license from BaFin.
The regulatory framework could strengthen the security of investors to such an extent that institutional investors increasingly enter the crypto business and thus favor a further price increase. Overall, it remains to be seen how the situation in Germany will develop by the end of the year.