A few days ago, the Berlin Court of Appeal had to rule on a sanction imposed at the expense of a German exchange operating without a license.
According to the ruling, “trading with bitcoin is not punishable because Bitcoin is not a financial instrument within the meaning of the KWG“, i.e. the legislation in force in Germany.
The Federal Financial Supervisory Authority (BaFin) had classified bitcoin as a unit of account in the Banking Act, which made permission to trade in cryptocurrencies mandatory in Germany.
But, because of its decentralized nature, and since bitcoin is not regulated by a central bank or any other public authority, the Court ruled that it cannot be considered as a currency. Therefore, the KWG rules are not to be considered valid with regard to bitcoin exchanges.
In this way, the Berlin Court of Appeal clearly contradicts BaFin’s classification, even though BaFin has stated that they will not change their procedures for the time being: this ruling should be considered as a case in itself and therefore they will continue to impose the application for permission to trade bitcoin.
However, exchanges now have much stronger legal arguments than before to defend themselves against BaFin’s interference.
This interpretation is in line with that of the European Court of Justice, which had defined cryptocurrencies as “voluntary means of exchange”.
