Germany’s financial regulator has granted Coinbase the first cryptocurrency custody license, as the exchange aims to list “all assets”
While Binance has recently faced regulatory challenges, including warnings from Japan’s FSA and the UK’s FCA, Coinbase has received positive news from European authorities.
Yesterday, Germany’s Federal Financial Supervisory Authority (BaFin) announced that it had granted Coinbase a cryptocurrency custody license — the first of its kind issued by the regulator.
An amendment to the EU’s Fourth Anti-Money Laundering Directive, enacted into law at the end of 2019, requires any service provider that exchanges virtual currencies for fiat money (and vice versa) to obtain BaFin approval in order to operate in Germany.
Coinbase Germany GmbH is now the holder of that inaugural license. To address the new and complex issues arising from the regulation of cryptocurrency custody businesses, BaFin created a multidisciplinary, interdepartmental team to evaluate the matter thoroughly.
Although cryptocurrency service providers are now subject to regulation in Germany, BaFin clarified that the crypto assets themselves remain unregulated. As a result, its previous warnings to crypto investors still apply: there is no protection against losses.
Meanwhile, Coinbase co-founder and CEO Brian Armstrong reminded followers on Twitter of the company’s long-term goals, which include listing “all assets where it is legal to do so.”
“Outside of our listing standards (for safety/legality), we do not offer an opinion on the value of any particular asset,” Armstrong explained. “We are asset-agnostic because we believe in free markets and in giving consumers choices in the crypto economy. That’s how we’ll get the most innovation. ”
The exchange has been adding assets at a rapid pace this year. After listing 21 new cryptocurrencies in 2020, Coinbase added 29 more assets in the first half of this year alone. Recent additions this month included Polkadot, Chiliz, Dogecoin and Shiba Inu. Coinbase Custody has added 74 new assets so far in 2021.
However, the CEO also cautioned: “In general, one should not interpret being listed on Coinbase as an endorsement of that asset (beyond meeting our minimum standards). Do your own research and evaluate the asset yourself.”