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In Germany, crypto firms will soon be required to be licensed by the Federal Financial Supervisory Authority (BaFin) in order to conduct business in the country.
Cointelegraph reported that new Anti-Money Laundering (AML) regulations will go into force in Germany next year and require cryptocurrency-related businesses, including exchanges and wallet providers, to be licensed by the regulator.
This, however, has attracted criticism from a lawmaker who believes that this would lead to exchanges and operators moving out of the country and into other EU nations.
In a report by local press outlet FAZ, parliament member Frank Schäffler of the Free Democratic Party is criticizing such tight regulations with regards to cryptocurrency. It is also worth noting that Schäffler is on the Board of BaFin and is considered a financial expert.
"The government is now forcing cryptocurrency trading platform providers to overrun the country and seek another location in the EU," he said.
Some would disagree with this sentiment, including the law firm Hengeler Mueller’s Christian Schmies. Schmies happens to think that such regulations will actually encourage growth in the crypto sector. He points out that “the technology has not yet been accepted by institutional investors because a reliable legal framework is missing.”
However, it would appear that crypto derivatives will not be under this new framework. Crypto derivatives are expected to remain subject to restrictions by the European Securities and Markets Authority (ESMA), Financial Magnates reports.
It remains to be seen if Germany will see fit to make any changes to this setup as it pursues further regulations to govern the crypto industry. This is also part of the EU’s broader push for more anti-money laundering regulations that apply to cryptocurrencies as part of the Fifth Money Laundering Directive (AMD 5).
