German regulator compares crypto projects to UFOs in push to regulate space
BaFin’s Rupert Schaefer compared some crypto and DeFi projects to UFOs
Marko Aliaksandr/Shutterstock modified by Blockworks
Germany’s financial regulator, the Federal Financial Supervisory Authority, published a post on Monday focused on what the regulator can learn from the “turbulence” in the crypto markets.
Schaefer likened the need for crypto regulation to flight rules, arguing that passengers are at risk if there isn’t “orderly air traffic.”
“Some crypto assets and decentralized finance projects certainly resemble unidentifiable flying objects. It would be negligent to simply ignore them,” Ruper Shaefer, executive director of strategy, policy and control at BaFin said.
“As financial regulators, we are sitting in the tower. We must know their characteristics, understand them, know their route and intervene if necessary. This is the only way we can ensure safe and orderly air traffic. Market participants can then also benefit from distributed ledger technology (DLT) in the long term,” he wrote.
Schaefer praised the Markets in Crypto Assets (MiCa) framework, which passed the European Union parliament vote in April. He added that “technical standards” need to be taken into account now in order to implement the regulation.
BaFin added that it supports the International Association of Securities Commission’s commitment to both protecting investors and ensuring integrity across the crypto markets.
“Now the common principles must be implemented consistently and consistently worldwide,” Schaefer wrote.
BaFin noted that it takes its “supervisory standards seriously,” meaning that the regulator will only grant “permission” to crypto companies that “have a plausible business model, sufficient start-up capital and reliable management staff.”
Schaefer wrote, “It must not be the case that providers with potentially dubious business models and lax compliance operate from virtual locations. Only then can we create a level playing field and an orderly airspace in which all passengers feel safe, even on long-haul flights.”
Back in July, Binance withdrew its BaFin application “proactively,” as previously reported by Blockworks.
The withdrawal came after Finance Forward reported that BaFin declined to grant the license.
The move came as Binance reshuffled its European plans, withdrawing from the Netherlands and delisting from the country’s register in Cyprus.
Binance previously told Blockworks that it is “working hard to prepare our business to be fully compliant with MiCa” prior to its official rollout.
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