German regulator compares crypto projects to UFOs in push to regulate space

BaFin’s Rupert Schaefer compared some crypto and DeFi projects to UFOs

article-image

Marko Aliaksandr/Shutterstock modified by Blockworks

share

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.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (1).jpg

Research

Jupiter has emerged as the undisputed liquidity backbone of Solana, commanding over 90% of spot DEX aggregation and 80% of perp trading volume. But behind the numbers lies a far more ambitious play: a cross-chain, vertically integrated super-app spanning swaps, synthetics, NFTs, memecoins, and launchpads. This report explores Jupiter’s rapid rise, the monetization upgrades reshaping its revenue profile, and the risks that could unwind its dominance, from token dilution to competition. With annualized revenues nearing $300M, the upside is undeniable, if it can navigate the turbulence.

article-image

Zora’s announcement that its token is for “fun only” sparked a debate about the need for such tokens

article-image

In recent weeks, Helium has hit new all-time highs while passing major protocol milestones

article-image

Financial advisers in a January survey said equity ETFs were their top choice for gaining crypto exposure in 2025

article-image

“Why put a target out there that’s really speculative, not knowing exactly where this environment is going to go?” CarMax CEO Bill Nash said

article-image

While the head of Base may support legal sex work, Coinbase policies prohibit said workers from using its exchange.

article-image

EVM bottlenecks fundamentally hold back Ethereum’s scalability