Legal and Tax Pitfalls When Dealing with Cryptocurrencies
summary
German law treats cryptocurrencies as assets, not currency, so BaFin may classify accounting units as subject to the Banking Act (KWG) for commercial operations while the Payment Services Act (ZAG) can apply when custody or short-term holding creates a payment service; supervisors typically expect substantial capitalization (anecdotally up to ~€1,000,000 to satisfy requirements). Tax rules make private crypto gains taxable if held under one year with a €600 exemption threshold; mining and ICO/DAO proceeds are taxed as commercial income and exchanges must follow AML/KYC. Smart contracts generally do not by themselves create independent valid contract formation under current law.
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chapters (8)
- 0:00Start
- 2:51DEFINITIONS
- 6:26WHAT IS CRYPTOCURRENCY
- 9:02UNIT OF ACCOUNT OF THE BAFIN
- 13:18BANKING ACT
- 16:40PAYMENT SERVICE PROVIDER
- 23:58SMART CONTRACT & DAO
- 39:32INCOME TAX
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