BaFin's Crackdown: Crypto Investment Rules for Asset Managers

user avatar

by Giorgi Kostiuk

2 years ago

Germany's financial regulator, BaFin, is introducing stringent rules for asset management firms due to the rising popularity and risks of crypto investments.

New Rules and BaFin's Requirements

BaFin has issued a new circular, now open for consultation, outlining legal obligations for asset managers and custodians dealing with crypto investments. Asset managers must apply for an extension of their license to invest in crypto assets through Alternative Investment Funds (AIFs) if their current license does not cover such investments.

Obligations for Asset Managers

Before making crypto allocations, asset managers must adapt and test their investment processes and assess whether a crypto asset is an eligible investment. Companies must ensure they have adequate resources and skilled employees for handling cryptocurrencies. They should provide training for existing staff or hire external experts. At least one manager must have theoretical and practical knowledge of crypto assets.

Opportunities and Risks of Crypto Investments

Some investment funds can allocate funds to crypto assets, but these carry risks such as potential losses from hacker attacks. Spezial-AIFs, available to professional investors including pension funds, can invest in cryptocurrencies. Under the FoStoG, Spezialfonds can invest up to 20% in cryptocurrencies.

While cryptocurrencies offer new investment opportunities, the associated risks require stricter regulatory measures as implemented by BaFin.

Tier I

Sector: #18291

Sealed Hiding Place Room

Resource Cache

Resource Cache

Tier I

Requires 25% Tier Progress to Claim
Meme Cache

Meme Cache

Tier I

Requires 50% Tier Progress to Claim
Equipment Cache

Equipment Cache

Tier I

Requires 75% Tier Progress to Claim

After collecting, hiding places will be stored in your inventory and can be opened with Keys.

Other news

Arca Desktop App Now Open to Public for AI Session Monetization

The Arca desktop app has launched to the public, allowing users to monetize their AI session data.

user avatarJacob Williams

Exodus Reports Third-Quarter Revenue Growth Amid Net Loss

Exodus reported a 7% revenue increase in Q3, reaching $325 million, but faced a net loss of $83 million, highlighting rising operational costs.

user avatarZainab Kamara

eToro Reports Decline in Third-Quarter Net Income Amid Growing Funded Accounts

eToro reports a significant decline in third-quarter net income to approximately $15 million, down from $57 million last year, despite an 18% growth in funded accounts.

user avatarSon Min-ho

Bitdeer Achieves Record Revenue but Faces Major Losses

Bitdeer reported record revenue of $320.7 million for Q3 2023, an 89% increase year-over-year, but faced a net loss of $125.5 million.

user avatarAyman Ben Youssef

Bitcoin May Benefit from Greater Regulatory Clarity

Bitcoin may benefit from a more predictable US regulatory environment as the SEC shows interest in blockchain-based financial infrastructure.

user avatarKofi Adjeman

SEC Reports Significant Decline in Enforcement Actions

The US Securities and Exchange Commission (SEC) has reported a significant decline in enforcement actions, marking the lowest level since 1991, under the Trump administration.

user avatarTando Nkube

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.