Crypto license in Germany

Last Update: 13.11.2025

Germany is a reliable EU jurisdiction with strict BaFin oversight, where crypto businesses enjoy a high level of trust from clients and partners. Gofaizen & Sherle will help you obtain a Crypto license in Germany and complete all stages without unnecessary complications.

Germany remains one of the strictest and most reputable jurisdictions for crypto business in Europe. Regulation is carried out by the Federal Financial Supervisory Authority — BaFin, which is responsible for the stability of the financial market and investor protection. Until recently, the legal framework was based on the provisions of the Kreditwesengesetz (KWG), where crypto custody was defined as a licensable activity. However, as of 30 December 2024, the MiCA Regulation (EU) 2023/1114 entered into force in Germany, establishing unified standards for all crypto-asset service providers (CASP) in the EU.

Now any company working with digital assets must obtain a BaFin license under MiCA. A transitional period applies to existing players. The German authorities have set it until 31 December 2025. This means that the remaining months of 2025 are a critical deadline for all providers still operating under a KWG license. If by the end of the year a company does not submit an application and obtain CASP authorization, its activities in Germany will be considered illegal.

At the EU level, the transitional period is longer — until 1 July 2026 — but Germany has chosen a strict scenario: full transition to MiCA by the end of 2025. It is also important to consider international risks: in a number of EU countries, the transition window is limited to only six months, and German companies without a MiCA license cannot operate there from mid-2025.

Key features of regulation in 2025:

BaFin remains the competent authority but operates under MiCA standards.
A transitional period has been introduced; old licenses are valid on a limited basis until a CASP application is submitted.
Updated AML/KYC procedures are required in accordance with MiCA and the TFR.
Requirements for IT security and the protection of client assets have been strengthened.
Segregation of client funds and company funds is enshrined in law and remains a basic principle.

Thus, crypto regulation in Germany today combines residual KWG norms and new MiCA standards, but by the end of 2025 national licenses will finally lose their force. For businesses this means the need for urgent adaptation: preparing AML/KYC documentation, updating IT procedures, and aligning corporate governance with European requirements.

What activities are included in crypto services in Germany?

Since December 2024, Germany has moved to the MiCA regime, and all crypto services are regulated under unified European rules. To enter the market, new companies are required to obtain a crypto license with CASP status.

Activities included in crypto services:

Custody of crypto-assets — storage and administration of digital assets and private keys.
Operation of trading platforms — management of crypto exchanges and trading systems.
Exchange services — exchange of cryptocurrency for fiat and vice versa, as well as crypto-to-crypto operations.
Execution, receipt and transmission of orders — processing and execution of client orders.
Portfolio management and advisory — investment advice and asset management in cryptocurrency.
Transfer services — transfers of crypto assets between clients’ wallets or to third parties.

What types of activities are included in the services of operating VASPs in Germany?

Until the end of the transitional period, companies holding a Crypto Exchange License in Germany under the KWG may continue to operate within the permitted scope of activities.

In particular, they may:

provide crypto-asset custody services (crypto custody);
manage and protect clients’ private keys;
ensure the administration of cryptocurrency accounts;
provide ancillary operations related to the storage and security of digital assets.

Advantages of a crypto license in Germany

Obtaining a Crypto license in Germany opens up significant opportunities for business and strengthens its position in the European market. The main advantages are:

A BaFin license serves as official confirmation that the company meets the strictest regulatory standards in Europe. This enhances investor and client confidence and helps build long-term partnerships.

CASP authorization under MiCA provides access to the single European market. The company can provide crypto services in all EU countries without the need for repeat licensing.

A German license provides legal certainty for business. Clear rules in the AML/KYC sphere and the protection of client assets reduce regulatory risks and create a predictable basis for development.

Germany is among the EU leaders in implementing innovations in blockchain and fintech. A presence in this market strengthens a company’s reputation as a reliable and technologically advanced player.

Support from a developed infrastructure (banks, legal advisors, compliance providers) simplifies the launch and scaling of crypto projects. This makes a crypto license Germany a strategic tool for taking business to the next level.

Request more information about a crypto license in Germany.

Requirements for obtaining a crypto license in Germany

To work with digital assets in Germany, companies must obtain a BaFin license with CASP status under the MiCA Regulation (EU) 2023/1114. Key requirements include:

Legal form and capital.

Registration of a GmbH or AG in Germany, with minimum share capital from €125,000 (higher for some services). The funds must be verified and deposited into a bank account.

Reliable directors.

At least one local director with experience in the financial sector. Directors and key persons must meet BaFin’s “fit & proper” criteria.

AML/KYC procedures.

Development and implementation of internal rules to prevent money laundering and terrorist financing in accordance with the GwG and MiCA. An AML officer and a deputy are mandatory.

Physical office in Germany.

A registered office and real presence in the country are required.

IT security and internal procedures.

A description of infrastructure, cybersecurity policies, risk management processes, and the internal control system.

Business plan.

Submission of a detailed three-year plan with forecasts, strategy, and business model description.

Reliable shareholders.

Disclosure of beneficial owners, sources of capital, and corporate structure.

All documents are submitted to BaFin. It is important to note that from the end of 2025 KWG licenses cease to be valid, and all VASPs must switch to CASP status under MiCA to continue operating.

The process of obtaining a German crypto license

Company registration.

3–4 weeks

Step 1

The usual choice is a GmbH (limited liability company, minimum capital €25,000) or an AG (joint-stock company, capital €50,000). For startups a UG (from €1) is possible, but it is seldom used in the crypto business. It is necessary to open a bank account, pay in the stated share capital, and register a local office. In practice, BaFin may require evidence of real presence.

Preparation of the application package.

4–6 weeks

Step 2

A three-year business plan is prepared, describing the business model, financial forecasts, and target market. AML/KYC policies are developed in accordance with the GwG, including customer identification and transaction monitoring procedures. The IT infrastructure and cybersecurity measures are described, and an internal control system is created.

Appointment of key personnel.

2–3 weeks (in parallel with document preparation)

Step 3

The company must appoint directors, at least one of whom should be a German resident or a specialist with work experience in Germany. All managers are vetted by BaFin for compliance with “fit & proper” criteria (competence, reputation, no conflicts of interest). Appointment of an AML officer and deputy with relevant experience is mandatory.

Filing the application with BaFin

1 week to file

Step 4

The completed application package is filed with BaFin together with confirmation of paid-in capital and office registration. The government fee for reviewing the application is €10,750. Preparation quality is critical. Incomplete or inaccurate documents lead to delays and additional requests.

Review of the application by the regulator

3–6 months

Step 5

BaFin reviews the business model, the origin of capital, the company’s financial stability, corporate structure, and management qualifications. The regulator also assesses the implemented AML/KYC procedures and IT systems. If necessary, BaFin may request clarifications or additional documents.

Obtaining the license

immediately after approval

Step 6

Following a positive decision by BaFin, the company obtains CASP status and may provide crypto services in Germany and throughout the EU under MiCA. After issuance of the crypto exchange license in Germany, the company is obliged to report regularly to the regulator, maintain AML/KYC procedures, and undergo inspections.

BaFin and cryptocurrency regulation in Germany

Crypto regulation in Germany is considered one of the most detailed and stringent in Europe. The main supervisory authority is BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht), the Federal Financial Supervisory Authority. Its primary task is to maintain the stability of the financial system, protect clients, and establish transparent operating rules for market participants.

Legal status of crypto assets

From the perspective of German law, cryptocurrencies are not recognized as currency or legal tender. BaFin classifies them as financial instruments or “units of account” under the Kreditwesengesetz (KWG). This means that activities related to crypto assets in many cases require a Crypto license in Germany, by analogy with traditional financial services.

KWG and BaFin license

Section 1 (1a) point 6 KWG provides that custody and administration of crypto assets for clients is a regulated activity. Section 32 KWG stipulates that companies providing such services must obtain BaFin authorization. When reviewing applications, the regulator assesses IT security, internal control procedures, and management qualifications.

Additionally, Section 26b KWG and Section 45 KMAG provide for the protection of client interests: user assets must be held separately from company assets and returned to clients in the event of the provider’s insolvency.

Introduction of MiCA and new rules for Crypto license Germany

As of 30 December 2024, Germany moved to the unified EU regime for crypto market regulation — the MiCA Regulation (EU) 2023/1114. The national licensing model (KWG) has been transformed into the CASP system, which covers a wide range of services:

custody and administration of crypto assets;
exchange of cryptocurrencies into fiat and back;
management of trading platforms;
receipt and transmission of client orders;
provision of advice and investment recommendations;
transfer of crypto assets between wallets.

BaFin remains the national supervisory authority authorized to issue CASP licenses and to monitor compliance with MiCA standards. The regulator publishes guidance notes and clarifications for market participants, specifying the application procedure, compliance requirements, and token classification.

BaFin differentiates between various types of tokens:

Security tokens are regulated under securities laws.
Utility tokens may, in some cases, be exempt from regulation if used exclusively within a platform and not serving an investment function.

Additional legislation regulating crypto activities in Germany

In addition to the KWG and MiCA, other regulations apply to crypto enterprises in Germany:

Securities market regulation and the EU Markets in Financial Instruments Directive (MiFID II)
Define rules for trading tokens equated to securities and set requirements for investment services.
Regulation on the publication of investment prospectuses
Governs the issuance of crypto tokens and mandatory disclosure in public offerings.
German Capital Investment Code (KAGB)
Establishes rules for managing funds and collective investments, including tokenized assets.
Electronic Securities Act (eWpG)
Creates the legal basis for tokenization of securities and their registration in electronic registers.
Anti-Money Laundering Act (GwG)
Obliges crypto services to implement AML/KYC procedures for customer verification and transaction monitoring.
Banking Act and financial supervision (KWG)
The basic law defining crypto assets as financial instruments and regulating their custody and transfer.
Insurance Supervision Act (VAG)
Applies to projects related to insurance products and investment mechanisms.
Payment Services Regulation (ZAG)
Regulates crypto payments, digital asset transfers, and the activities of payment solution providers.
General Investment Code of Germany
Sets out basic rules for asset management and investor protection.

Transitional period for VASP companies

Operating VASPs authorized under the KWG may work under old licenses until 31 December 2025, but must prepare a CASP license application under MiCA. After the transitional period ends, activity based solely on national authorization will no longer be possible.

Types of crypto licenses in Germany

Since the end of 2024, Germany has moved to a new system for regulating the crypto market. Whereas previously businesses had to obtain different permits, for example for exchange or custody of assets, a unified CASP license now applies. This format is established by the pan-European MiCA regulation and replaces national VASP licenses.

The regulatory framework is based on strict supervision by BaFin. It is this authority that issues the BaFin license, which confirms the company’s right to legally provide crypto services in Germany and across the EU. This approach has become part of the unified model of crypto regulation in Germany, which is harmonized with European rules and ensures a high level of investor confidence.

The CASP license covers a wide range of services, including:

custody and administration of crypto assets;
management of trading platforms;
exchange of cryptocurrencies into fiat money and back;
crypto-to-crypto operations;
execution and transmission of client orders;
token offerings;
advice on crypto assets;
discretionary portfolio management;
transfers of crypto assets between addresses and wallets.

Thus, Germany no longer has multiple separate types of licenses. Instead, the unified CASP license allows companies to flexibly select and combine the services they need. For companies this means new opportunities in the European market, but at the same time new obligations to meet the strictest security and compliance requirements.

Steps for starting a crypto company in Germany

Launching a crypto company in Germany requires a comprehensive approach that includes incorporating a legal entity, meeting corporate requirements, and obtaining BaFin authorization under MiCA.

Company formation

Step 1

The most popular form is the GmbH (limited liability company). Registration includes preparing the articles, opening a bank account, paying in the capital, and filing documents with the Handelsregister (Commercial Register). The process takes on average 2–3 weeks.

Documentation preparation

Step 2

You must compile an application package including:

the company’s articles and copies of the owners’ and directors’ passports;
a business plan for at least three years;
an AML/KYC policy in accordance with the GwG;
a description of IT systems for data storage and asset protection.

All documents must be translated into German and notarized.

Office and management setup

Step 3

The company must have a local address in Germany. It is also required to appoint qualified directors (at least one should be local or have experience working in Germany) and an AML officer with a deputy. BaFin checks their competence and reputation.

Capital contribution

Step 4

It is important to distinguish two levels of capital requirements:

Share capital of a GmbH — €25,000, mandatory for company registration.
Capital for a CASP license from €125,000 to €350,000, depending on the type of crypto services (custody, administration, platform management, proprietary trading, etc.). These funds must be paid in and confirmed before filing the license application.

Registration in the Commercial Register

Step 5

Notarized documents are submitted to the Handelsregister. After registration, the company becomes a legal entity and may proceed to the licensing stage.

Obtaining a BaFin license

Step 6

To operate in the crypto sphere, you must apply to BaFin for a CASP license. The application is accompanied by a business plan, financial forecasts, an IT systems description, capital confirmation, and information about the management.

Post-licensing obligations

Step 7

After obtaining the license, the company must comply with MiCA requirements: submit regular reports, maintain internal AML/KYC procedures, ensure that client assets are held separately from its own, and be prepared for BaFin inspections.

Request more information about a crypto license in Germany.

Post-licensing obligations

After obtaining a Crypto license in Germany, the company enters a regime of ongoing supervision. This is not a final point but the start of a phase where oversight by the regulator and tax authorities becomes regular and systematic:

Reporting and BaFin oversight

The regulator requires continuous disclosure from companies. This includes financial statements, internal control data, and information about clients and transactions. BaFin reserves the right to request additional documents or explanations at any time. This mechanism makes it possible to promptly identify violations and reduce risks for clients.

Protection of client assets

One of the key requirements is full segregation of client funds from company funds. Assets must be held separately, which guarantees their return in the event of the provider’s insolvency. This principle is enshrined in German banking law and is fundamental to trust in the crypto business.

Compliance and IT security

Internal procedures cannot remain static. Each licensed company is required to:

regularly update its AML/KYC policy;
adapt its risk-management system;
maintain a high level of cybersecurity;
train staff on new regulatory requirements.

This is especially important for companies working with international clients, as they are under close scrutiny not only by BaFin but also by European supervisory authorities.

Audit of cryptocurrency companies

For medium and large companies, an audit is mandatory. Independent auditors confirm the accuracy of financial statements, proper tax accounting, and compliance with HGB and IFRS standards.
Small enterprises (fewer than 50 employees, assets < €6 million, and turnover < €12 million) may be exempt from mandatory audit.
Companies working with foreign counterparties are required to disclose all transactions in as much detail as possible. These operations most often become the subject of enhanced review.

MiCA and national norms

Since the end of 2024, the MiCA regulation has been in force, unifying rules across Europe. For German companies this means that:

the transfer of crypto assets is accompanied by application of the Travel Rule,
additional information about tokens and clients must be disclosed,
MiCA provisions are supplemented by local laws (FinMADiG, KMAG) specifying compliance procedures.

Conclusion

Germany has moved from the national system of BaFin licenses under the KWG to the unified European CASP regime. Adoption of the FinMADiG Act on 18 December 2024 empowered BaFin to issue licenses under MiCA as of 30 December 2024.

For existing providers with a BaFin license, a transitional period has been set until 31 December 2025. However, it is important to note that many EU countries have chosen shorter timelines — for example, 6 months (the Netherlands, Poland, Finland) or 12 months (Germany, Ireland, Spain). This means that German CASPs without a MiCA license cannot provide services in countries with shortened periods already from July 2025.

Accordingly, the situation is as follows:

Companies with valid BaFin licenses may continue to operate in Germany until the end of 2025 but are required to file for a CASP license.
New companies must obtain MiCA authorization immediately.
International activity is possible only with a CASP license; otherwise access to EU markets will be restricted.

Germany remains a strict yet attractive jurisdiction. A BaFin CASP license provides businesses with stability and the right to operate across the entire European market. However, postponing the transition is not an option. Companies planning international expansion should prepare documents and apply in 2025.

FAQ about Crypto license in Germany

What is a crypto license in Germany?

A Crypto license in Germany is an official BaFin authorization operating under MiCA. It confirms a company’s right to provide services with crypto-assets in Germany and the EU, including custody, exchange, and platform management.

What types of businesses require a crypto license?

A Crypto license Germany is required for companies engaged in the custody of digital assets, wallet management, crypto exchanges, exchange services, trading on behalf of clients or on their own account, as well as advisory services on crypto assets.

What are BaFin’s main requirements for applicants?

To obtain a BaFin license, the applicant must contribute minimum capital (€125k–€350k depending on services), have an office in Germany, prepare a business plan, implement AML/KYC systems, and appoint qualified management vetted by the regulator.

What are the main advantages of obtaining a German license?

Crypto regulation in Germany ensures transparency and trust. The license provides access to the EU market, strengthens reputation with investors, guarantees the protection of client assets, and confirms that the company meets the strictest standards of financial oversight.

Can I apply if my company is not registered in Germany?

No, a German legal entity is required to file an application. This is usually a GmbH with share capital from €25,000 and an office in Germany. Only after incorporation can a company obtain a Crypto Exchange License in Germany and enter the market under BaFin supervision.

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