In addition to Bitcoins, the best-known cyrptocurrency, other digital currencies exist such as Ether, Litecoins, Dogecoins, PPcoins, Namecoins and Altcoins. Due to their independence from central banks and other central supervisory authorities and their resulting character as an alternative to central bank money and gold, cryptographic currencies are also referred to as alternative currencies or substitute currencies. Although Satoshi Nakamoto already made Bitcoins available to the general public as open source software in namecoins bitcoin 2009, it still took some time before the market for the alternative currency existed of more participants than just a few subscribers of cryptography newsletters.
If the beginning was difficult, now, hardly a day passes by without the media reporting on Bitcoins and other digital currencies. Due to the increased media coverage Bitcoins have experienced and theresulting use of Bitcoin for payment and investing purposes, there are some risks at hand. Those risks also apply to startups and established businesses dealing with Bitcoins. Given the enormous dynamic, which characterizes the Bitcoin market, it is hardly surprising that policy, society and governments lag behind the actual developments. The digital reality will only be given the necessary legal framework slowly and piece by piece.
This permission is therefore always required when the proposed activity is a banking business or a financial service. Thus, the actual risks regarding exchange and deployment of Bitcoins are obvious. Numerous legal and tax issues accompanying Bitcoin businesses are not solved yet: Are Bitcoins within the meaning of the German Civil Code at all? What exactly are Bitcoins for tax purposes? Providers, platform operators and distributors of so-called cryptographic currencies should know that dealing with those is not above the law, particularly when it comes to supervision, such as banking supervision. How to avoid problems with my Bitcoin business? Despite open questions concerning regulation, Bitcoin business thrive in Germany.
Bitcoins, you should keep yourself up-to-date on the cryptocurrency’s development and make sure that you have sufficient know-how before launching a Bitcoin related business in Germany. WINHELLER is a competent partner not only in classic banking and capital market law. Consulting an attorney on matters of legality, regulation and taxation ensures legally consistent transactions of cryptocpoins. We draft General Terms and Conditions for Bitcoin companies and represent them towards supervisory authorities in respect to all questions regarding supervisory law.