German financial regulator clarifies application procedure for foreign cryptocurrency custodians

According to CoinDesk, the German Financial Supervisory Authority (BaFin) is clarifying how the country's new cryptocurrency custody law will apply to companies operating outside Germany but still serving the German market. In its latest directive issued in January this year, the Financial Supervisory Authority said that companies that have provided digital assets to Germans will not be punished for not having permission. Under the new law, which went into effect on January 1, they will be subject to the same protections as German crypto hosting companies. This means that these companies must announce their intention to apply for a license by March 31 and apply for a license by November 30. Cryptocurrency companies that have not hosted cryptocurrencies for German customers before January 1st but are interested in the following cannot expand into the German market unless they obtain a license first. Germany drafted the law in response to the EU's fifth anti-money laundering directive (AMLD5), which requires crypto companies to demonstrate compliance with enhanced customer understanding (KYC) and anti-money laundering (AML) procedures. Although companies familiar with German financial regulation are already drafting applications, the industry will still be subject to any directives issued by the German Federal Financial Supervisory Authority in the coming months.