# Germany’s financial regulator issues guidance on licensing process for crypto custody firms By Catherine Martin Canonical URL: https://www.tokenpost.com/news/regulation/5038 Published: 2020-02-06T12:05:26.000Z Updated: 2020-02-06T12:05:26.000Z Section: Regulation > Germany's Financial Supervisory Authority (or BaFin) has released new guidelines to clarify how the country’s new law, which came into force last month, will apply to firms offering or intending to offer crypto custod… Germany's Financial Supervisory Authority (or BaFin) has [released new guideline]()s to clarify how the country’s new law, which came into force last month, will apply to firms offering or intending to offer crypto custody services to German customers. The law implementing an amendment to the Fourth EU Money Laundering Directive came into effect on January 1, 2020. With this, Germany has classified crypto depository services as a financial service under the German Banking Act and has brought crypto custodial service providers under the supervision of BaFin, according to Bird & Bird LLP. The law [defines]() 'crypto depository service' as "the safekeeping, administration and securing of crypto assets or private cryptographic keys which are used to hold, store or transfer crypto assets, for others (crypto depository service)". As such, all companies offering crypto custody services are subject to anti-money laundering regulations and are required to obtain a license from the regulator. The law sets a "transitional period" until November 2020 for companies that have been providing crypto custody services to German customers before Jan. 01. However, these companies have to notify the regulator in writing about their intention to apply for a license by March 31. In particular, foreign companies that are already doing the crypto custody business in Germany would not be penalized for not having a license, CoinDesk [reported](). They, however, have to notify the federal agency about their intention to apply for a license by March 31 and submit their license application by Nov. 30. On the other hand, firms that have not been offering crypto custody services to Germany-based users before Jan.01 but intend to enter the German market have to first obtain a license from the regulator to commence their operations. Last month, BaFin also issued a guidance notice on prospectus and authorisation requirements in connection with the issuance of crypto tokens. It said: "The issuance of crypto tokens that only entitle the holder to acquire a product or to use a service of the issuer, that do not provide for any returns to the acquirer and that are only issued against virtual currencies is not subject to an authorisation requirement." [TokenPost]() | info@tokenpost.com ## Links in this article - [released new guideline](https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Auslegungsentscheidung/BA/ae_Hinweise_zur_Auslegung_64y_KWG.html) - [defines](https://www.twobirds.com/en/news/articles/2020/germany/german-crypto-market-what-you-need-to-know-about-the-crypto-depository-service) - [reported](https://www.coindesk.com/germanys-bafin-clarifies-licensing-process-for-foreign-crypto-custodians) - [TokenPost](https://www.tokenpost.com)