Although the judgement at the Berlin Higher Regional Court will certainly not put every investor in the crypto sector into too much ecstasy. The current judgement on the partial question of whether trading crypto currencies requires prior permission from the authorities could be decisive for future decisions. Current media reports suggest this.
OLG Berlin refers to applicable Banking Act
To anticipate: The judges at the Court of Appeal of the Federal Capital come to the conclusion in their ruling that Bitcoin buying and trading in other digital currencies is not subject to licensing in Germany. What exactly is this about? About five years ago, a teenager had developed his own crypto exchange. When the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) became aware of this, the authority warned of a violation of the German Banking Act, which ultimately resulted in a fine. The previous judgment, which led to the punishment of the then 16-year-old defendant, has now been overturned by the Berlin Higher Regional Court (OLG). With an acquittal. The reasons for the decision will make many interested parties sit up and take notice. The Bitcoin is neither a state-recognised unit of account nor a financial instrument in the current sense of the legislation under the Banking Act.
judges see limits of BaFin tasks violated
Exactly this classification of crypto currencies has been hotly debated for years. BaFin had already classified Bitcoin as a “complementary currency” in 2011. However, the court takes a different view of the fact that the digital lead currency is such a unit of account, whereby the orientation was from the aforementioned KWG. And this contains now once again regulations from the time before the boom of the crypto currencies like Ethereum or Dash. On the basis of this legal situation, the German financial supervisory authority has thus carried out an incorrect assessment and ultimately committed a breach of law itself. The Higher Regional Court now judges that the authority had unjustifiably defined its actual area of responsibility too broadly. BaFin is responsible for implementing the legal situation, but not for legislation. Nevertheless the BaFin wants to stick to the “permission reservation”.
In the end it will presumably require a supreme court interpretation by the Federal Administrative Court, as many legal experts already suspect. This is the only way to achieve an interpretation of the law that takes account of new parameters. However, should the authority unexpectedly accept the ruling, this could open the door to innovative developments. For example consumers could soon exchange Fiatgeld for Kryptowhrungen at automats, how it is already occasionally possible abroad.
Experts increasingly call for political and legal changes
The judgement is also interesting for existing platforms for the crypto trade. Without an existing obligation to obtain permission, market launches would have been much less bureaucratic and thus simpler and faster. The time has come for a new perception of the growing market, as many industry experts regularly demand. Unfortunately, the Grand Coalition has so far held back on other crypto issues despite announced measures.