BitGo granted crypto custody license by German regulator
BitGo, a U.S.-based wallet infrastructure provider and digital asset custodian, has received a crypto custody license from the German Federal Financial Supervisory Authority (BaFin). This follows the firm’s approval for a New York trust charter from the New York Department of Financial Services (NYDFS) in 2021.
Since 2019, under BaFin’s supervision and as part of a transitional regime, BitGo has been providing crypto asset storage services for its clients. In 2020, the firm established two new entities in Switzerland and Germany to expand its European operations. The Swiss entity, BitGo GmbH, falls under the regulation of the country’s Financial Market Supervisory Authority (FINMA). The German entity, BitGo Deutschland GmbH, has indicated its intention to apply for a license once the opportunity arises.
This expansion mirrors moves by other players in the industry, such as Coinbase Custody, which opened an office in Ireland, and Fidelity Digital Assets, which launched a branch in the U.K. Germany’s largest lender, Deutsche Bank AG also applied for regulatory approval to operate as a cryptocurrency custodian in Germany. The Deutsche Bank’s digital asset custody prototype caters specifically to institutional clients to establish a seamless connection between them and the broader cryptocurrency ecosystem.
“BaFin is recognized as one of the world’s key trendsetters in crypto regulation. It enables the progress that digital currencies entail while creating a secure regulatory framework. We have worked hard to obtain this license. Now we are pleased to have reached this milestone,” said Dejan Maljevic, the managing director of BitGo Europe.
Germany has been creating a friendly environment for crypto custodians, passing laws that allow banks and crypto specialists to manage digital assets and offer related services. However, the regulatory landscape remains challenging, as seen with Binance, the world’s largest cryptocurrency exchange, which was compelled by the German regulator to withdraw its application for a crypto license.
German financial regulatory authority told Binance in June that it will not issue a digital asset custody license to the crypto giant. The exact nature of this denial, whether it was a formal ruling or a communicated intention during ongoing discussions, has not been clarified.
Binance stated that it will not disclose specific details of its conversations with regulators in Germany. However, the exchange affirmed its commitment to comply with BaFin’s requirements. Binance described the process as detailed and ongoing, emphasizing that it is confident in having the necessary team and measures in place to address the regulatory concerns and navigate the situation.