BaFin's market research survey on 'Derivatives with crypto assets' closes on Friday

As the market volume of crypto currencies has constantly increased over the past years, the German Federal Financial Supervisory Authority (BaFin) has committed to conducting a market research survey on derivatives with crypto assets as underlying asset, for active participants in this market.

The completed responses from all market participants can be submitted to BaFin electronically or by post by 13 December 2019.  


BaFin's legal mandate also includes consumer protection. Therefore, BaFin observes and analyzes market developments in Germany, which includes the current changes in the crypto currency market, in its analysis – this enables BaFin to assess the risks for market participants. The volume in the crypto currency market - and in particular the supply of derivatives has risen steadily in recent years (certificates and contracts for difference – CFD, which reference crypto assets as an underlying). 

The survey refers to so called "crypto assets". However, BaFin does not define the future term financial instrument under the German Banking Act - KWG, definition which will be introduced as part of the implementation of the fifth money laundering directive (AMLD5) by 10 January 2020, instead BaFin uses its own definition of "crypto assets" itself for the market survey.

Initially, there was no legal definition of “crypto assets”. BaFin therefore based their definition on guidance from the Financial Stability Board (FSB) and the European Securities and Markets Authority (ESMA): "crypto-asset" includes all digital investments that are not financial instruments under the German Security Trading Act - WpHG (if it is a financial instrument under the KWG is not relevant in this respect), any legal tender, and any securitized rights and not issued or monitored by a central bank.' 

This means, security tokens will not be covered by the survey. Rather, will only focus on currency or payment tokens (Bitcoin, Ether, Litecoin or Ripple).

Important information 

BaFin sees the need to define the image of the current cryptocurrency market in Germany. BaFin also urges a note of caution on trading with derivatives with crypto assets, due to the amount of warnings and advice from international authorities (FCA, AFM or also CCAF) with regards to market abuse, financial crime, the above-average risk factor and market growth of crypto currencies. The survey is open for all market participants, but will focus on:

• Investors and prospective investors
• Consumer protection associations
• Suppliers and issuers
• Interest groups

The market survey contains 19 questions and participants should submit their responses to BaFin by 13 December 2019.

BaFin intends to publish the results as soon as possible.



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