BaFin logo in a gray sign

Boerse Stuttgart Digital blocknox service receives BaFin license in a pioneering move

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Boerse Stuttgart Digital, the virtual currency arm of Boerse Stuttgart exchange has received a main license to offer custody services from the German Federal Financial Supervisory Authority (BaFin).

In a statement, Boerse Stuttgart Group CEO Matthias Voelkel said the new license will see the firm offer the trio of brokerage, trading, and custody services to clients. Previously, Boerse Stuttgart Digital offered clients custody services through its blocknox offering under a provisional license back in 2020.

The firm expanded its offering to include trading via the launch of its trading app as it sought to attract a wider range of institutional and retail clients. Boerse Stuttgart Digital’s new BaFin custody license was received ahead of other players, including Binance and FTX.

“This is the first time that an established market participant has been licensed to hold cryptocurrencies in custody without any acquisitions,” said Voelkel. “For banks, brokers, asset managers, and family offices, this makes us the infrastructure partner of choice.”

New German regulation in January 2020 made it imperative for all virtual asset service providers to seek registration from BaFin. Typically firms are issued with a provisional license, allowing them to operate in the country with certain limitations pending a final license after fulfilling the requirements.

“Reliability, stability, and transparency form the basis for well-functioning crypto markets,” Boerse Stuttgart Digital MD Oliver Vins added. “The BaFin license reinforces us on our path to provide financial institutions across Europe with secure access to a growing market for digital assets using these core principles.”

Boerse Stuttgart Digital is not the only player in the custody space; Bankhaus von der Heydt recently gained approval from BaFin, while the partnership of DZ Bank and Swiss Metaco is also poised to offer German investors an array of options.

BaFin picking up the regulatory pace

The German financial regulator has been stepping up the ante against unlicensed activities in the virtual currency sector. Rtcoin was the recipient of a BaFin warning in December 2022 for alleged violation of the German Banking Act for soliciting investment from the public without a license.

Binance, Coinbase, and other service providers have fallen under BaFin’s regulatory hammer in recent times amid a crackdown on digital currency ATMs in Germany. Given the heightened tempo of its regulatory activity, BaFin has been inundated with several requests from firms seeking approval from the financial watchdog.

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