The Legal Side of Crypto-Assets Custody

Recent legal developments worldwide have shown acceptance of digital assets. Many governments have understood the great possibilities and opportunities that Blockchain technology brings and the unavoidable direction towards tokenization of assets and the crypto economy that the financial industry has been taking. A pivot point in history has occurred by supporting crypto custody which implies an assessment of the risks and solutions to mitigate them. Here, we present a summary of the countries working towards the crypto-economy and relevant information about minimum requirements for the custody of digital assets.

Germany

The German Act Implementing the Amending Directive on the Fourth EU Anti-Money Laundering Directive of 2019 included the crypto custody business in the German Banking Act (Kreditwesengesetz — KWG) as a new financial service. Here is the summary of the most important implications:

• Reports must be provided and documents submitted in accordance with Section 32 (1) KWG to BaFin (German Federal Financial Supervisory Authority) and a license must be obtained in order to offer crypto-custody services.
• In those cases where business activities also cover financial instruments within the meaning of MiFID II, the authorization process might be based on Delegated Regulation (EU) 2017/194…