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Germany Sets Standard for Bitcoin Regulation

65 points by guruz 13y ago

JonSkeptic 13y ago
>Inter alia the following conditions must be met: -Initial capital of 730.000 Euros -Management must be professionally qualified -A detailed business plan must be submitted -Capital adequacy standards must be met -AML mechanisms must be implemented -Reports must be submitted to BaFin regularly Well...are there any bitcoin exchanges that meet those requirements in Germany?
- rb2k_ 13y ago
  bitcoin.de has some sort of cooperation with a German Bank: https://blog.bitcoin.de/en/bitcoin-de-und-fidor-bank-ag-vereinbaren-weitgehende-partnerschaft https://blog.bitcoin.de/en/bitcoin-de-und-fidor-bank-ag-vere... As from the start of the cooperation, which will be activated upon the registration with the German Federal Financial Supervisory Authority, Bitcoin Deutschland GmbH will become Fidor Bank AG’s so-called “tied agent” to conduct the bitcoin trading for Fidor Bank AG on bitcoin.de. That might help them with most of these things.
Fuxy 13y ago
Well the regulations are a pain but at least bitcoin will be more readily available if it gets recognized.
dmix 13y ago
Why does every government agency dealing with business have an obsession with "detailed business plans"? The key to regulating companies is clearly to require them to write 30 pages of creative writing detached from the reality of how the business will operate a few months later. How about a few page summary of the business with profiles of the team members, or pitch deck, without all the useless detail.
- MoreConsiderate 13y ago
  They want people with assets with something to lose, an aspect of the AML logic.
- deleted 13y ago
  [deleted]
  - VMG 13y ago
    Why should it be the responsibility of the government to filter out the crap? The market does that pretty well. I think they just want to filter so that there are fewer companies to regulate, disregarding the fact that this kind of regulation affects small businesses disproportionately.
    - jpswade 13y ago
      I'm just giving you the reason. I'm sorry, I don't have all the answers.
- rayiner 13y ago
  Governments think of the financial system the way ATT or VZN think of their cellular networks. Nobody is going to let you plug in your new cellular device with just a pitch deck about how it works. Also: to filter out ponzi schemes and the like.
  - oleganza 13y ago
    "Ponzi schemes" are like "pornodrugterrorists" - just a pseudo-reason to protect the monopoly in the eyes of the voters at their own expense. Maybe if people were allowed to decide whether they want to pay for "protecting" them from ponzi schemes, we would know how these problems could be solved most efficiently. However, the taxes are not paid, but extracted, so we cannot really find out what is the better way to protect ourselves.
    - rayiner 13y ago
Houshalter 13y ago
That's ridiculous. You shouldn't need millions to just trade bitcoins. Some of those requirements are arbitrary and needless hurdles like being "professionally qualified". And then some are just track people that use bitcoin and what they are doing with it. Does this apply to all bitcoin companies like it said, or just exchanges?
- iSnow 13y ago
  To those who exchange BTC for fiat or operate cryptocoin banks or any company in the financial business dealing with BTC. As a bar owner who accepts BTC for beer, you are fine. However, the German Gov't has already declared they are set out to discuss how to tax companies that accept BTC.
- PeterisP 13y ago
  What do you mean by "all bitcoin companies" ? This regulation would apply just as normal financial service regulation - to companies that make bitcoin/money transfers on behalf of others, as a payment service provider (like paypal is regulated); that hold bitcoins on behalf of others (like any deposit-accepting bank is regulated) or those that buy/sell bitcoins from public (like currency exchanges are regulated).
  - Houshalter 13y ago
    That's better, but still ridiculous.
Rudism 13y ago
Forgive me if I'm just being ignorant on the matter (I'm not super familiar with Bitcoin), but wasn't one of the founding principles of Bitcoin the idea that it wasn't/wouldn't be regulated?
- jlgreco 13y ago
  Personally held bitcoins are not regulated in the same way that personally held cash is not regulated. That is to say, it is regulated... but (depending on how you acquire/spend your bitcoins or cash) it works on the honor system. Think of waiters receiving cash tips.
  - joe_the_user 13y ago
    Paper money is private. Bitcoins are public (connecting wallets to people is a challenge but with whole Internet tapped, maybe not a huge challenge).
    - cinquemb 13y ago
      If one considers that the vast majority of people don't go through the lengths to remain pseudonymous on the web, connecting identities to wallets will (eventually) be trivial for the mainstream. However, I find it the case that as of now, that is inversely proportional to the people that use bitcoin. Not to mention all the laundry services out there or that could be placed on the front end of services used through tor (and possibly meshnets in the future).
      - PeterisP 13y ago
        And just as with cash income, attempting to launder bitcoin income turns it from a fine for undeclared income to a prison term for money laundering/intentional tax evasion.
    - jlgreco 13y ago
      Hence the "(depending on how you acquire/spend your bitcoins or cash)". With bitcoin it is much harder to keep your identity unconnected from your wallet (particularly if you want to do anything with it), though it is possible.
ferdo 13y ago
Thus far, government efforts to regulate ones and zeroes haven't met with great success.
- iSnow 13y ago
  Regulation is not about the ones and zeros but about the conversion of € to BTC and account keeping. Both account keeping and converting one currency into another are well understood problems for regulators.
  - ferdo 13y ago
    Regulation is about control, which is what Germany is now trying to do with Bitcoin. I suspect the regulators will fail with regard to control of Bitcoin in the long run.
    - JonFish85 13y ago
      "I suspect the regulators will fail with regard to control of Bitcoin in the long run." How do you figure? Germany, like any other developed country, can simply go to the delta: merchants who want to stay in business. Want your business license? Better comply with currency laws.
      - VMG 13y ago
        Then can regulate some of the end points, but they can't control the transactions themselves.
      - ferdo 13y ago
        The argument could be made that this move by Germany is actually a ploy to make Bitcoin look like a paperwork/legal nightmare and time-moneysuck so that merchants will stay away from it. Bitcoin is too useful to be squashed by mere government regulation. If a few more countries employ these draconian measures, some cash-starved government will welcome Bitcoin in the future. If regulators ("the body of Leviathan and the head of a social worker", to lift from Joseph Stromberg) were smart, they'd advocate easy exchange rules and impose a small tax on each transaction on the exchange. Over the course of generations, I tend to have more faith in markets than in governments. That's why I think regulators will fail in their efforts in the long run.
ton10 13y ago
What about alternative coins? http://coinmarketcap.com/ http://coinmarketcap.com/
- yxhuvud 13y ago
  The article mentions Litecoin and Ripple as well, so regulation would probably apply to them as well.
mrb 13y ago
Note that the reporting on this story is not very clear. Those requirements listed (730,000 EUR minimum capital, etc) are only for Bitcoin exchanges. These regulations do not apply to, eg. businesses merely selling products/services for bitcoins.
perlpimp 13y ago
Hm interesting, I wonder if bringing such rules to the bitcoin currency trading, at least in Germany would somewhat legitimize it. Stricter requirements might dissuade some but on the flip side of the coin it may well bring even more serious players to the bitcoin market thus making it more substantial and well balanced. Just guessing though. my 2c.

65 points by guruz 13y ago

>Inter alia the following conditions must be met: -Initial capital of 730.000 Euros -Management must be professionally qualified -A detailed business plan must be submitted -Capital adequacy standards must be met -AML mechanisms must be implemented -Reports must be submitted to BaFin regularly Well...are there any bitcoin exchanges that meet those requirements in Germany?

rb2k_ 13y ago
bitcoin.de has some sort of cooperation with a German Bank: https://blog.bitcoin.de/en/bitcoin-de-und-fidor-bank-ag-vereinbaren-weitgehende-partnerschaft https://blog.bitcoin.de/en/bitcoin-de-und-fidor-bank-ag-vere... As from the start of the cooperation, which will be activated upon the registration with the German Federal Financial Supervisory Authority, Bitcoin Deutschland GmbH will become Fidor Bank AG’s so-called “tied agent” to conduct the bitcoin trading for Fidor Bank AG on bitcoin.de. That might help them with most of these things.

Fuxy 13y ago

Well the regulations are a pain but at least bitcoin will be more readily available if it gets recognized.

dmix 13y ago

Why does every government agency dealing with business have an obsession with "detailed business plans"? The key to regulating companies is clearly to require them to write 30 pages of creative writing detached from the reality of how the business will operate a few months later. How about a few page summary of the business with profiles of the team members, or pitch deck, without all the useless detail.

MoreConsiderate 13y ago
They want people with assets with something to lose, an aspect of the AML logic.
deleted 13y ago
[deleted]
- VMG 13y ago
  Why should it be the responsibility of the government to filter out the crap? The market does that pretty well. I think they just want to filter so that there are fewer companies to regulate, disregarding the fact that this kind of regulation affects small businesses disproportionately.
  - jpswade 13y ago
    I'm just giving you the reason. I'm sorry, I don't have all the answers.
rayiner 13y ago
Governments think of the financial system the way ATT or VZN think of their cellular networks. Nobody is going to let you plug in your new cellular device with just a pitch deck about how it works. Also: to filter out ponzi schemes and the like.
- oleganza 13y ago
  "Ponzi schemes" are like "pornodrugterrorists" - just a pseudo-reason to protect the monopoly in the eyes of the voters at their own expense. Maybe if people were allowed to decide whether they want to pay for "protecting" them from ponzi schemes, we would know how these problems could be solved most efficiently. However, the taxes are not paid, but extracted, so we cannot really find out what is the better way to protect ourselves.
  - rayiner 13y ago

Houshalter 13y ago

That's ridiculous. You shouldn't need millions to just trade bitcoins. Some of those requirements are arbitrary and needless hurdles like being "professionally qualified". And then some are just track people that use bitcoin and what they are doing with it. Does this apply to all bitcoin companies like it said, or just exchanges?

iSnow 13y ago
To those who exchange BTC for fiat or operate cryptocoin banks or any company in the financial business dealing with BTC. As a bar owner who accepts BTC for beer, you are fine. However, the German Gov't has already declared they are set out to discuss how to tax companies that accept BTC.
PeterisP 13y ago
What do you mean by "all bitcoin companies" ? This regulation would apply just as normal financial service regulation - to companies that make bitcoin/money transfers on behalf of others, as a payment service provider (like paypal is regulated); that hold bitcoins on behalf of others (like any deposit-accepting bank is regulated) or those that buy/sell bitcoins from public (like currency exchanges are regulated).
- Houshalter 13y ago
  That's better, but still ridiculous.

Rudism 13y ago

Forgive me if I'm just being ignorant on the matter (I'm not super familiar with Bitcoin), but wasn't one of the founding principles of Bitcoin the idea that it wasn't/wouldn't be regulated?

jlgreco 13y ago
Personally held bitcoins are not regulated in the same way that personally held cash is not regulated. That is to say, it is regulated... but (depending on how you acquire/spend your bitcoins or cash) it works on the honor system. Think of waiters receiving cash tips.
- joe_the_user 13y ago
  Paper money is private. Bitcoins are public (connecting wallets to people is a challenge but with whole Internet tapped, maybe not a huge challenge).
  - cinquemb 13y ago
    If one considers that the vast majority of people don't go through the lengths to remain pseudonymous on the web, connecting identities to wallets will (eventually) be trivial for the mainstream. However, I find it the case that as of now, that is inversely proportional to the people that use bitcoin. Not to mention all the laundry services out there or that could be placed on the front end of services used through tor (and possibly meshnets in the future).
    - PeterisP 13y ago
      And just as with cash income, attempting to launder bitcoin income turns it from a fine for undeclared income to a prison term for money laundering/intentional tax evasion.
  - jlgreco 13y ago
    Hence the "(depending on how you acquire/spend your bitcoins or cash)". With bitcoin it is much harder to keep your identity unconnected from your wallet (particularly if you want to do anything with it), though it is possible.

ferdo 13y ago

Thus far, government efforts to regulate ones and zeroes haven't met with great success.

iSnow 13y ago
Regulation is not about the ones and zeros but about the conversion of € to BTC and account keeping. Both account keeping and converting one currency into another are well understood problems for regulators.
- ferdo 13y ago
  Regulation is about control, which is what Germany is now trying to do with Bitcoin. I suspect the regulators will fail with regard to control of Bitcoin in the long run.
  - JonFish85 13y ago
    "I suspect the regulators will fail with regard to control of Bitcoin in the long run." How do you figure? Germany, like any other developed country, can simply go to the delta: merchants who want to stay in business. Want your business license? Better comply with currency laws.
    - VMG 13y ago
      Then can regulate some of the end points, but they can't control the transactions themselves.
    - ferdo 13y ago
      The argument could be made that this move by Germany is actually a ploy to make Bitcoin look like a paperwork/legal nightmare and time-moneysuck so that merchants will stay away from it. Bitcoin is too useful to be squashed by mere government regulation. If a few more countries employ these draconian measures, some cash-starved government will welcome Bitcoin in the future. If regulators ("the body of Leviathan and the head of a social worker", to lift from Joseph Stromberg) were smart, they'd advocate easy exchange rules and impose a small tax on each transaction on the exchange. Over the course of generations, I tend to have more faith in markets than in governments. That's why I think regulators will fail in their efforts in the long run.

ton10 13y ago

What about alternative coins? http://coinmarketcap.com/ http://coinmarketcap.com/

yxhuvud 13y ago
The article mentions Litecoin and Ripple as well, so regulation would probably apply to them as well.

mrb 13y ago

Note that the reporting on this story is not very clear. Those requirements listed (730,000 EUR minimum capital, etc) are only for Bitcoin exchanges. These regulations do not apply to, eg. businesses merely selling products/services for bitcoins.

perlpimp 13y ago

Hm interesting, I wonder if bringing such rules to the bitcoin currency trading, at least in Germany would somewhat legitimize it. Stricter requirements might dissuade some but on the flip side of the coin it may well bring even more serious players to the bitcoin market thus making it more substantial and well balanced. Just guessing though. my 2c.