Crypto License in Germany

Most businesses apply as a GmbH (Gesellschaft mit beschränkter Haftung) or an AG (Aktiengesellschaft) because these legal forms are well-recognized under German corporate law. A GmbH is often the preferred vehicle for startups due to simpler governance requirements, whereas larger or publicly traded entities might lean toward AG status.

Under normal circumstances, BaFin aims to issue a decision within six months of receiving a complete application for a Crypto License in Germany. However, this timeline can stretch if your business model is complex, or if additional documentation and clarifications are required.

For most crypto-related services—such as exchange, trading, and custody—BaFin typically requires at least EUR 125,000 in initial share capital. The exact amount can vary based on the scope of your activities and risk profile. This capital must be deposited in a recognized financial institution in Germany.

All licensed crypto providers in Germany must implement a risk-based AML and KYC policy, which includes verifying customer identities, monitoring transactions for suspicious activity, and reporting any red flags to the Financial Intelligence Unit (FIU). Non-compliance can result in hefty fines or license revocation.

Yes. However, at least one locally-based director or compliance officer is strongly recommended, if not strictly required. BaFin often insists on having someone on the ground in Germany to manage day-to-day compliance matters and coordinate communication with supervisory authorities.

Licensed crypto entities must regularly submit financial statements, risk assessments, and AML reports to BaFin. You may also need to comply with quarterly or annual audits, providing transparency on how you handle customer funds, manage security risks, and uphold compliance protocols.

While the overarching requirement is to secure a Crypto License in Germany if your staking or lending services qualify as regulated financial instruments, tax and regulatory treatment varies based on the specific business model. It’s advisable to seek tax consultancy to fully understand how staking rewards or lending interest are classified under German tax law.

Apart from the 15.83% corporate income tax, German crypto businesses may be liable for trade tax, which varies by municipality. VAT considerations depend on whether tokens are deemed a currency (exempt) or digital goods (subject to 19% VAT). Additionally, capital gains tax rules apply for certain transactions, although long-term holdings (>1 year) can be exempt at the individual level.

Yes. Each regulated activity—such as exchange, brokerage, custody, or proprietary trading—might require a separate scope extension within your overarching BaFin license. BaFin reviews each service line individually to ensure compliance across all operational segments.

Small or newly formed companies may not need immediate external audits if they fall below certain thresholds—such as turnover, asset value, and number of employees. However, pre-revenue status does not exempt you from maintaining proper accounting records or meeting BaFin’s minimum organizational standards.

Stablecoins often fall under enhanced scrutiny because they can function similarly to e-money or traditional financial instruments. If your business model involves issuing or managing stablecoins, additional guidelines—particularly under the upcoming MiCA legislation—may apply.

Yes, some businesses opt to buy an existing crypto company that already holds a BaFin license. While this can speed up market entry, thorough due diligence is essential to confirm that all compliance obligations have been met and that there are no hidden liabilities.

Operating crypto-related services without a Crypto License in Germany is considered a serious offense. BaFin can impose fines, demand cessation of operations, and even pursue criminal charges in cases of suspected money laundering or fraud. Always secure proper authorization before launching any crypto services.