The Federal Financial Supervisory Authority (BaFin) has published a note on the handling of ICOs and cryptocurrencies in Germany. The aim of the paper is to clarify the regulatory framework for ICOs in Germany.
Like the Swiss ICO guideline, BaFin also provides for a case-by-case examination for each ICO and the associated cryptocurrency. In principle, according to BaFin, it should be examined whether the coins issued within the framework of ICOs are:
a financial instrument i.S.d. Securities Trading Act (WpHG),
a financial instrument i.S.d. Markets in Financial Instruments Directive (MiFID II),
a security i.S.d. Securities Prospectus Act (WpPG) or
an investment according to the Investment Act (VermAnlG)
is. This examination is geared to a quantity of paragraphs and laws that are barely manageable for laymen and which are listed relatively rigidly in BaFin’s five-page document.
However, arguably the most important statement in the document is that market participants wishing to conduct an ICO are themselves responsible for verifying that it is one of the above-mentioned regulated instruments (“should be scrutinized”). Thus, the Bafin makes it very easy in our view, by pushing the classification and thus the responsibility in principle to the ICO initiator.
In case of doubt, if it is not certain whether a license is required, an application should be submitted to the BaFin, Department for Authorization and Tracing of Unauthorized Transactions (TOE).