Not your keys, but your coins - New German Law Grants Cryptocurrency Rights in Custody Services

Yesterday, the ZuFinG (Act on the Implementation of the EU Crowdfunding Regulation and on the Amendment of Financial Market Laws) was announced; accessible at:

One of the contents includes changes to the #KWG (German Banking Act), for example, § 46i (1) sentence 1 KWG:

(1) Cryptocurrencies held for a customer as part of a crypto custody business are deemed to belong to the customer.

This is intended to enable particularly rights of segregation for #cryptocurrencies, cf. § 47 InsO (German Insolvency Code). In the event of insolvency of a cryptocustodian, customers are supposed to recover their cryptocurrencies even though they typically do not know the keys. The well-known principle "not your keys, not your coins" might no longer apply... at least under the German insolvency law.

The changes in the KWG partly anticipate the MiCAR (Markets in Crypto Assets Regulation). According to Art. 35 (1) of the ZuFinG, the above regulation comes into effect one day after its announcement, starting today.

I personally remain 100% in favor of self-custody. However, I believe that such a law could make the topic of Bitcoin more appealing to the average citizen as it associates buying or holding with less risk.