Crypto Custody Business: Understanding Authorisation Requirements
Introduction
Crypto custody business is a rapidly growing financial service that involves the safekeeping and management of crypto assets and crypto securities. As the demand for cryptocurrencies increases, so does the need for reliable and secure custody solutions.
Authorisation Requirements
In order to operate a crypto custody business, it is crucial to obtain authorisation. The specific authorisation requirements may vary depending on the jurisdiction in which the business operates. In many countries, including Germany, businesses must obtain a license from the relevant financial regulatory authority.
Guidelines for Authorisation Applications
In Germany, the Federal Financial Supervisory Authority (BaFin) provides guidance on the authorisation process for crypto custody business. The guidelines include:
- Eligibility criteria for applicants
- Requirements for governance and internal controls
- Safeguarding and management of crypto assets
Recent Developments
In 2023, BaFin published a guidance sheet on the crypto securities register. This guidance provides further clarification on the registration requirements for businesses involved in the issuance, trading, and custody of crypto securities.
Additionally, BaFin has been actively working to enhance its regulatory framework for crypto assets. The regulator aims to ensure that crypto businesses operate in a safe and compliant manner, protecting investors and market integrity.
Conclusion
Authorisation is essential for crypto custody businesses to operate legally and provide reliable services to their clients. By adhering to the guidelines and regulations set by financial regulatory authorities, these businesses can contribute to the growth and stability of the crypto ecosystem.
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