German Financial Regulator published paper on regulation of cryptoassets

The German Federal Ministry of Finance published a key issues paper on the treatment and regulation of blockchain-based securities, according to a ministry announcement on March 8.

The regulator discusses the introduction of regulations for electronic securities and the issuance of crypto tokens. The document stipulates that the regulation of electronic securities should be technology-neutral, which means that they could be based on blockchain, or distributed ledger technology (DLT).

The issuance of crypto tokens purportedly will not be subject to existing market regulations since crypto tokens do not represent securities, investment or other financial instruments according to the Securities Trading Act. However, initial coin offering (ICO) of crypto tokens is put up for discussion in the paper as investing in crypto tokens purportedly poses risks for investors.