PayTechTalk 46 – Crypto custody business: Amendments to the KWG in connection with the implementation of the fifth Anti-Money Laundering Directive

PayTechTalk 46 | Kryptoverwahrgeschäft | PayTechLaw
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At first glance, the “Act implementing the Amending Directive of the fourth EU Anti-Money Laundering Directive” does not sound particularly exciting, but in fact, it is. Anti-money laundering issues have, contrary to what the name of the act might suggest, hardly made it into the headlines of our FinTech & crypto bubble. What was trending on the other hand, were “Lex Apple Pay“ and “crypto custody business”. The Lex Apple Pay, which will also be the subject of our next PayTechTalk, has already been looked into by my colleague Susanne. Today, we are talking about “crypto custody business” as a new financial service in the German Banking Act (KWG).

What happened so far

At the end of July 2019, the German government presented its first draft law, which has since been the subject of some discussion, along the lines of: Crypto regulation is a step in the right direction. Germany is on the verge of “crypto heaven”. This type of “rushed regulation“ in a national solo effort will only spark disputes. Banks will soon have a whole new area of business. Consumer protectors warned against new “distribution models to the detriment of consumers”. We at PayTechLaw also added our bit to the discussion. In our PayTechTalk No. 44, we criticised Germany’s unilateral approach to crypto regulation as well as the nonsensical separation requirement.

Fortunately, as we know today, the separation requirement did not make it into the final legal text. This is probably due to a recommendation by the second chamber of Parliament, the German Federal Council, so we would like to take this opportunity to say thank you very much, German Federal Council!

Crypto custody business as a new financial service – what now?

The headlines of recent weeks, as well as the adoption of the final text of the law, have prompted us to take another close look at what has actually changed compared to the first draft of the law. Among other things, we consider the question as to why banks (with only a few exceptions) so far do not directly offer crypto values to their customers or keep crypto values for their customers, although they have (always) been legally allowed to do so.

We also dare to make a little prediction as to how the new law will change market conditions and how market participants will react.

I will discuss this and more with our guest today, Hartmut Giesen from Sutor Bank, in what is our 46th episode of PayTechTalk – enjoy!



About Hartmut Giesen

Hartmut Giesen: Hartmut has been implementing digital business models for Sutor Bank since 2012. His tasks include Business Development Fintech, digital partners and Crypto/Blockchain, the development and expansion of the Sutor Banking platform as well as the support of internal digitisation projects.

Sutor Bank is the banking-as-a-service partner of successful FinTech companies such as Zinspilot, Growney, and Fintiba. Currently, more than 180,000 customers of digital partners use this banking platform. In addition to platform banking, Sutor Bank is also active in the areas of private banking, foundation management and B2B banking for financial product distributors.


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