The Markets in Crypto-Assets Regulation (MiCA) introduces a unified regulatory framework for crypto-assets across the European Union (EU), promoting legal certainty, investor protection, and market stability. One of the core requirements under MiCA is obtaining a Crypto-Asset Service Provider (CASP) license, mandatory for businesses offering crypto asset services.
This licensing ensures compliance with strict standards on governance, security, and anti-money laundering (AML), enabling licensed CASPs to operate seamlessly across all EU member states. Whether you are an emerging startup or an established operator, obtaining a CASP license is essential to access the EU’s vast and dynamic market for digital assets.
In Germany, the Federal Financial Supervisory Authority (BaFin) is the competent authority overseeing CASP licensing under MiCA. Businesses operating or planning to provide crypto-asset services in Finland must adhere to local implementation requirements alongside MiCA’s EU-wide provisions.
Our firm has a thorough knowledge of German law and BaFin requirements, ensuring that your compliance efforts are efficient and effective.
We can help your business meet compliance requirements and unlock the potential of the EU crypto market!
In Germany, the BaFin is the competent authority overseeing CASP licensing under MiCA
Key Numbers about a CASP License in Germany
3 mountsaverage term of obtaining CASP license after application submission |
at least severaldirectors in a CASP |
up to €150kamount of the share capital depending from CASP activity |
up to 45%personal income tax (PIT) rate |
15%corporate income tax (CIT) rate |
15/45%capital gains tax (CGT) rate |
Legal Opinion about a CASP License in Germany
Ganna Voievodina
Manimama
|
CEO
“Entities intending to provide crypto-asset services, such as custody, exchange must secure CASP license from BaFin, Germany's supervisory authority. The licensing process requires compliance with robust AML/KYC measures, operational resilience standards, and consumer protection requirements. Existing providers may benefit from a simplified transition procedure if they already hold national licenses under previous frameworks. Failure to comply can result in significant penalties, emphasizing the importance of rigorous adherence to regulatory standards”.
Types of Activities with a CASP License in Germany
Providing custody and administration of crypto-assets on behalf of clients
This service means safekeeping or controlling, on behalf of third parties, crypto-assets or the means of access to such crypto-assets, where applicable in the form of private cryptographic keys. Holdings of crypto-assets on behalf of the clients shall be segregated from CASP’s holdings.
Operation of a trading platform for crypto-assets
This service contains of the management of one or more multilateral systems, which brings together or facilitates the bringing together of multiple third-party buying and selling interests for crypto-assets – in the system and in accordance with its rules – in a way that results in a contract, either by exchanging one crypto-asset for another, or a crypto-asset for funds.
Exchange of crypto-assets for funds
This service means the conclusion of purchase or sale contracts concerning crypto-assets with clients for funds by using proprietary capital.
Exchange of crypto-assets for other crypto-assets
This service means the conclusion of purchase or sale contracts concerning crypto-assets with clients for other crypto-assets by using proprietary capital.
Execution of orders for crypto-assets on behalf of clients
This service means concluding agreements to buy or to sell one or more crypto-assets or to subscribe for one or more crypto-assets on behalf of third parties and includes the conclusion of agreements to sell crypto-assets at the moment of their issuance.
Placing of crypto-assets
This service includes the marketing, on behalf of or for the account of the offeror or of a party related to the offeror, of crypto-assets to purchasers. Before placing the crypto-assets a CASP shall obtain the agreement of the issuers or any third party acting on their behalf.
Reception and transmission of orders for crypto-assets on behalf of clients
This service means the reception from a person of an order to buy or to sell one or more crypto-assets or to subscribe for one or more crypto-assets and the transmission of that order to a third party for execution.
Providing advice on crypto-assets
This service means offering, giving or agreeing to give personalized recommendations to a third party, either at the third party’s request or on the initiative of the a CASP providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services.
Providing portfolio management on crypto-assets
This service includes managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more crypto-assets.
Providing transfer services for crypto-assets on behalf of clients
This service means transfer, on behalf of a natural or legal person, crypto-assets from one distributed ledger address or account to another. Such service may be provided without virtual currency wallet opened for a CASP’s client.
Benefits of Obtaining a CASP License in Germany
Regulatory clarity and certainty:
- Operating under a regulated structure ensures clear compliance requirements, reducing legal uncertainties.
- Adherence to MiCA and national laws provides a predictable business environment.
Enhanced credibility:
- A CASP license enhances the reputation of the provider, signaling compliance with stringent regulatory standards.
- Licensed status increases attractiveness to institutional clients and partners.
Consumer protection compliance:
- Meeting consumer protection standards builds confidence among users and encourages adoption.
- Compliance reduces the risk of disputes, protecting both clients and the business.
Operational flexibility:
- The license permits a range of activities, from custody and exchange to advisory services.
- Providers can scale services to meet growing market demands while remaining compliant.
Legal safeguards:
- Licensing ensures adherence to regulatory requirements, minimizing the risk of fines or shutdowns.
- Access to clear guidance from BaFin helps mitigate compliance risks.
Improved risk management:
- Licensing mandates robust internal controls and risk management frameworks.
- Compliance reduces exposure to fraudulent activities and enhances operational security.
Our Services
STEP 1
Incorporation stage
- Company formation in Germany
- Provision of a registered address for 1 year
- Opening corporate bank account and transferring the share capital
- Appointment and employment of a local director
- Detailed company structure documentation
STEP 2
Pre-licensing stage
- Preparation and submission legal and financial documents (non-exhaustive list) according to MiCA
- Review of existing policies and procedures, if the company already has them
STEP 3
Licensing stage
- CASP license application assistance
- Conducting communication with the BaFin during the license process
Our Experts in this Area
Step by Step Description
-
Initial setup
- Initiating a preliminary project assessment
- Creating an action plan
- Preparation and filing of the package of documents
-
Company registration
- Choosing and reservation of the company name in the German Chamber of Commerce and Industry
- Facilitating the notarial process for the company's official registration
- Opening a corporate bank account and paying at least half of the minimum capital (i.e. €12,500) on a bank account
- Incorporating the company's data into the German Companies Registry
- Obtaining the Certificate of incorporation issued by the Companies Registry, and Articles of Association
- Notifying the local trade office about the planned activity and applying for any necessary business permits
- Filing application for tax, VAT & EORI numbers
-
Obtaining a CASP license
- Preparation of documents according to MICA
- Submission an application to the licensing authority - BaFin
- Reviewing the application to ensure it is complete (if any documents or information are missing, the applicant will be notified and given a specific deadline to provide the necessary additional documentation)
- Assessment of the documents` content submitted (a detailed review to verify that all regulatory requirements are met)
- Requesting of additional details (if applicable)
- Notification of grant or refusal of the CASP license
- Granting or refusal notification to European Securities and Markets Authority (ESMA)
- Publication in ESMA register
German National Legislation
Entities active as of December 29, 2024 are granted a transitional regime until December 31, 2025
Regulation:
The Bundesrat of Germany has approved the Financial Market Digitalization Act (FinmadiG). This legislation marks a significant milestone in the financial sector by introducing complex regulation of crypto-assets in line with the evolving needs of the digital economy. FinmadiG introduces Cryptomarkets Supervision Act (KMAG) is a legislative framework in Germany to regulate crypto markets and align with the broader EU regulatory landscape, particularly the MiCA. The KMAG serves as a national implementation measure that integrates MiCA requirements into German law and provides the legal basis for the supervision of crypto asset services in the country. As for now, the KMAG is undergoing the legislative process and has not yet entered into force.
Licensing authority:
Supervisory responsibilities lie on the BaFin, which oversees compliance with both national and European crypto regulations. BaFin ensures that CASPs meet requirements related to consumer protection, market integrity, and operational resilience. CASPs authorized in Germany are entered in a public register maintained by the BaFin.
Procedure, timelines fees:
The BaFin must assess within 25 working days of receiving an application for authorisation whether all of the required information has been included in the application. At this stage, however, the BaFin will not assess the quality of the information provided. The BaFin may ask the applicant to supplement the application if some or all of the required information is missing. The authority will set a deadline for the submission of any missing information. After the submission of missing information, it will have 40 working days to make a qualitative assessment of the application. During this period, the BaFin has the opportunity to submit additional requests for clarification, but only the first of these requests will suspend the 40 working day assessment period, for a maximum of 20 working days.
A fee is charged for processing an authorization application. A processing fee is charged for both positive and negative decisions. If the processing of a case is suspended due to the applicant’s withdrawal of their application, a fee will be charged for costs incurred in processing the case up to the time of cancellation.
Transition period:
Entities active as of December 29, 2024 are granted a transitional regime until December 31, 2025. They may utilize a simplified authorisation process but must notify BaFin of their intent to provide services at least 40 days in advance.
Requirements for Obtaining a CASP License in Germany
Capital requirements for a CASP vary depending on what services the company will provide - from €50,000 to €150,000
Physical office requirements
A CASP shall have a registered office in Germany where it carries out at least part of their crypto-asset services.
Requirements for key persons
-
Senior managers (directors):
- Number: MICA does not specify a minimum and maximum number of directors. However, MICA states (part 2, article 59) that there shall be at least several directors.
- Residency requirements: At least one director must be an EU resident.
- General requirements: Directories must have a solid reputation, necessary skills, and relevant experience.
- Required documents:
- a clean criminal record;
- a detailed CV;
- statements on time commitment and past professional conduct.
-
Shareholders:
- Number: MICA does not specify a minimum and maximum number of shareholders.
- Residency requirements: There is no restriction.
- General requirements: Shareholders must have a solid reputation, necessary skills, and relevant experience.
- Required documents:
- a clean criminal record;
- an ownership structure chart.
Capital requirements
Capital requirements vary depending on what services the company will provide:
Class 1: A CASP authorized for the following crypto-asset services:
- execution of orders on behalf of clients;
- placing of crypto-assets;
- providing transfer services for crypto-assets on behalf of clients;
- reception and transmission of orders for crypto-assets on behalf of clients;
- providing advice on crypto-assets; and/or
- providing portfolio management on crypto-assets.
Minimum capital requirements - €50,000.
Class 2: A CASP authorized for any crypto-asset services under Class 1 and:
- providing custody and administration of crypto-assets on behalf of clients;
- exchange of crypto-assets for funds; and/or
- exchange of crypto-assets for other crypto-assets.
Minimum capital requirements - €125,000.
Class 3: A CASP authorized for any crypto-asset services under Class 2 and:
- operation of a trading platform for crypto-assets.
Minimum capital requirements - €150,000.
Documentation requirements
There are list of documents that must be submitted with the application:
-
Documents required for all CASPs:
- The articles of association of the applicant CASP
- Identity and proof of good repute, knowledge, skills, experience and of sufficient time commitment of the members of the management body
- Information relating to shareholders or members with qualifying holdings
- A program of operations setting out the types of crypto-asset services that the applicant CASP wishes to provide, including where and how these services are to be marketed
- A description of the applicant CASP’s prudential safeguards (insurance policy)
- A description of the applicant CASP’s governance arrangements and internal control mechanisms
- A description of the applicant CASP’s business continuity plan
- Detection and prevention of money laundering and terrorist financing (full packet of policies)
- Descriptions both in technical and non-technical language of applicant CASP’s IT systems and security arrangements
- A description of the applicant CASP’s procedures to handle complaints from clients
- Documents required in case CASP wishes to offer services in other countries:
- List of EU countries where the company wishes to offer its services
- Documents required for certain services (each of the 10 services requires its own documents):
- Custody and administration policy
- A description of the procedure for the segregation of client’s crypto-assets and fund
- The operating rules of the trading platform and market abuse detection
- Information on the exchange of crypto-assets for funds or other crypto-assets (commercial policy)
- The execution policy
- Information on the provision of advice or portfolio management on crypto-assets
- Information on transfer services
Taxes in Germany
The standard CIT rate in Germany is 15% plus solidarity surcharge and trade tax
Corporate Income Tax (CIT)
CIT in Germany is a key aspect of the country’s taxation system, applying to corporations, limited liability companies (GmbHs), and other legal entities.
Corporations domiciled or with a place of management in Germany are subject to CIT on their worldwide income. Non-resident corporations are taxed on income sourced in Germany, typically through a permanent establishment or certain German-source income (e.g., real estate or dividends).
Income taxation of corporate companies generally consists of three components:
- the standard CIT rate in Germany is 15%
- a solidarity surcharge is added on top of the CIT; the surcharge is a fixed and flat nationwide component of company taxation and set at a rate of 5.5% of the 15% CIT (not the income); creating a total of around 0.8% of taxable income; Taken together, the corporate income tax and solidarity surcharge amount to a total taxable rate of around 15.8%
- in addition to CIT, companies are subject to a municipal trade tax, which varies depending on the municipality. The effective trade tax rate typically ranges from 7% to 21%, with an average combined CIT and trade tax rate of approximately 30%
Capital Gains Tax (CGT)
In Germany, the taxation of cryptocurrency falls under the general income tax framework for individuals and corporations.
For individuals:
- cryptocurrency gains are taxed as private income at the individual's progressive income tax rate, ranging from 0% to 45%, plus a 5.5% solidarity surcharge
- gains from cryptocurrencies are tax-free if they are under €1,000 or if the holding period exceeds one year
For corporations:
- for businesses, cryptocurrency is considered part of their taxable assets
- corporate income tax - 15%, plus 5.5% solidarity surcharge
- trade tax - 7% to 21%, depending on the municipality
- combined effective tax rate: approximately 30%
Personal Income Tax (PIT)
The PIT rate for cryptocurrencies in Germany ranges from 0% to 45%. The actual tax rate depends on your total taxable income.
The German PIT rates:
- €0 to €11,604 - 0%
- €11,604 to €66,760 - 14 to 42%
- €66,760 to €277,825 - 42%
- over €277,825 - 45%
Frequently Asked Questions
-
What is a CASP license in Germany?The CASP license allows companies to legally offer crypto asset services in Germany.
-
Who issues the CASP license in Germany?The Federal Financial Supervisory Authority (BaFin) issues CASP licenses.
-
What services can be provided under a CASP license?
It allows services such as:
- 1) Providing custody and administration of crypto-assets on behalf of clients
- 2) Operation of a trading platform for crypto-assets
- 3) Exchange of crypto-assets for funds
- 4) Exchange of crypto-assets for other crypto-assets
- 5) Execution of orders for crypto-assets on behalf of clients
- 6) Placing of crypto-assets
- 7) Reception and transmission of orders for crypto-assets on behalf of clients
- 8) Providing advice on crypto-assets
- 9) Providing portfolio management on crypto-assets
- 10) Providing transfer services for crypto-assets on behalf of clients
-
What are the key requirements to obtain a CASP license in Germany?Companies must meet physical office requirements, requirements for managers and shareholders, minimum capital requirements, documentation requirements.
-
Is it mandatory to have a physical office in Germany to obtain a CASP license?Yes, a local office in Germany is required for regulatory oversight.
-
Is there a minimum capital requirement for obtaining a CASP license?Yes, applicants must meet specific financial and operational adequacy standards, but the exact minimum capital depends on the services offered (€50,000, €125,000, €150,000).
-
What is the process for applying for a CASP license?The process involves submitting an application to BaFin with detailed documentation on the company structure, management, AML policies, and financial plans, etc.
-
How long does it take to obtain a CASP license?The preparation of documents and the review process typically takes several months, depending on the completeness of the application and the authority's workload.
-
What are the fees associated with obtaining and maintaining a CASP license?Application and annual supervision fees apply, and they vary based on the scale of services provided.
-
What is the role of management in meeting CASP license requirements?The management team must demonstrate relevant experience, integrity, and the ability to manage crypto-related risks.
-
Can an individual apply for a CASP license, or is it limited to companies?The CASP license is typically issued to legal entities, not individuals.
Наші останні юридичні дослідження
Сompany registration in Wyoming (USA): Legal aspects and advice
February / 28 / 2025
|
15 m. to read
Go To News
Company registration in Hong Kong: Legal aspects and advice
February / 27 / 2025
|
15 m. to read
Go To News
Top 3 Strangest Lawsuits in History
February / 26 / 2025
|
15 m. to read
Go To News
Legal Vocabulary: breaking down the complex with a pinch of humor
February / 25 / 2025
|
15 m. to read
Go To News
How Due Diligence Helps Identify Risks in Crypto and Blockchain Projects – Part 2
February / 25 / 2025
|
15 m. to read
Go To News
