MiCA in Germany

MiCA, Regulation (EU) 2023/1114, is EU law and applies in Germany the same way it applies in every Member State, without a German act of transposition for its main duties. What Germany added is the Kryptomärkteaufsichtsgesetz (KMAG), the law that names BaFin as the competent authority for MiCA in Germany (KMAG section 3) and carries the national transitional rule under MiCA Article 143 (KMAG section 50). So a crypto firm in Germany reads two texts side by side: the EU regulation for the duties, and KMAG for BaFin's powers and the German timeline.

Before MiCA, crypto firms in Germany operated under the Kreditwesengesetz, which since 2020 required a license for crypto custody business and, from later amendments, for other crypto services. That national license regime is now replaced by the EU-wide MiCA authorization, so firms that held the old German license had to move into the new regime during the transition.

A firm whose business is one or more of the ten crypto-asset services MiCA lists, from custody and trading platforms to advice and portfolio management, needs authorization as a crypto-asset service provider (CASP) under Articles 59 and 63. BaFin runs this licensing process from its offices in Bonn and Frankfurt am Main. A bank or investment firm that already holds a license under other EU financial law can skip the full CASP process: Article 60 lets credit institutions, investment firms and a few other regulated firms offer crypto services after a notification to BaFin, filed at least 40 working days before the first service, instead of a new authorization.

Exchanges that serve German customers work through this licensing path. Binance, eToro and Bitget are among the platforms that offer crypto services in Germany and across the EU under MiCA authorization, either their own or passported from another Member State's regulator, since a CASP license obtained in one EU country is valid across the whole EU under Article 65.

MiCA let firms that operated under national law before December 30, 2024 continue for a transitional period of up to 18 months, with each Member State free to shorten it. According to the ESMA list of grandfathering periods, Germany chose 12 months, so a firm that held the old German crypto custody license had to complete its MiCA authorization, or wind down, within that window. Other Member States set the period anywhere from 6 to 18 months, so a firm passporting crypto services from Germany into other EU countries had more than one deadline to track.

For compliance teams at German crypto firms, current work centers on three things: keeping the CASP authorization current as the firm's services or markets grow, building the reporting and complaint-handling processes MiCA requires under its operating conditions, and watching the new EU Anti-Money Laundering Authority (AMLA), seated in Frankfurt, which will take a growing role in supervising cross-border crypto and financial firms. A CASP is also a regulated firm under DORA, so its contracts with cloud and custody technology providers belong in the same ICT register a bank keeps.

Finance Loop is the meeting place for compliance officers at crypto-asset service providers and banks, and for the exchanges and custody providers working through MiCA licenses. It connects the finance, IT and AI communities in Frankfurt and holds events in Munich, Berlin and Hamburg as well.

MiCAR, compliance and custody were among the topics of the Forum für Digitale Vermögenswerte, a German-language forum with Finance Loop as a partner. Finance Loop also partners with OKX, a crypto exchange that operates under a MiCA license in Europe, and at the Bybit EU Crypto Evening at TechQuartier a senior policy director spoke on compliance under MiCAR. Related pages: KYC in Germany, DORA in Germany and regtech in Germany.

MiCA itself is the EU regulation that sets the duties. Germany adds the Kryptomärkteaufsichtsgesetz (KMAG), which names BaFin as the supervisor and sets the German transitional rule. A crypto firm in Germany answers to both texts, not to a separate German MiCA law.

A firm that provides one or more of the ten MiCA crypto-asset services applies to BaFin for authorization as a crypto-asset service provider under Articles 59 and 63. A bank or investment firm that already holds another EU financial license can instead notify BaFin under Article 60, at least 40 working days before it starts offering crypto services.

Firms that held a crypto custody license under the German Kreditwesengesetz before December 30, 2024 could keep operating for a transitional period. Germany set that period at 12 months, so those firms had to complete their MiCA authorization, or stop taking on new business, once the period ended.