BitGo Secures Cryptocurrency Custody License from German Regulator

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Germany has solidified its position as a key player in the European crypto regulatory landscape with the recent approval granted to BitGo, a leading digital asset custody provider. The Federal Financial Supervisory Authority — known as BaFin — has officially awarded BitGo Deutschland GmbH a cryptocurrency custody license, marking a pivotal moment for institutional adoption and compliance in the region.

This development underscores Germany’s progressive yet rigorous approach to regulating digital assets, balancing innovation with investor protection and financial stability.

A Strategic Milestone for BitGo in Europe

Since 2019, BitGo has operated under BaFin's transitional regime, offering secure cryptocurrency storage solutions to clients while working toward full regulatory compliance. The newly issued license represents the culmination of years of strategic planning, regulatory engagement, and infrastructure development.

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In 2020, BitGo expanded its European footprint by establishing two new entities: BitGo GmbH in Switzerland, regulated by the Swiss Financial Market Supervisory Authority (FINMA), and BitGo Deutschland GmbH, which has now achieved full licensing under BaFin. This dual-jurisdiction presence strengthens BitGo’s ability to serve institutional clients across DACH (Germany, Austria, Switzerland) and broader EU markets.

The German entity emphasized that obtaining this license was a deliberate step to meet growing demand from asset managers, fintech firms, and traditional financial institutions seeking compliant ways to integrate digital assets into their portfolios.

Why Germany Is Becoming a Crypto Custody Hub

Germany’s regulatory framework has increasingly positioned the country as a preferred destination for crypto custody providers. Unlike some jurisdictions that remain ambiguous or hostile toward digital assets, Germany passed clear legislation allowing both banks and specialized crypto firms to offer digital asset custody services.

Under German law, licensed custodians can securely store private keys and manage cryptocurrencies on behalf of clients, ensuring legal clarity and protection. This regulatory certainty attracts global players looking for stable, transparent environments to scale operations.

Moreover, BaFin is widely recognized as one of the most influential financial regulators in the crypto space. Its rigorous standards ensure that only well-capitalized, operationally sound, and compliant firms gain approval — reinforcing trust among institutional investors.

“BaFin is recognized as one of the leading trendsetters in global crypto regulation. It enables digital currencies to progress while building a secure regulatory framework. We’ve worked hard to earn this license — and we’re proud to have reached this milestone.”
— BitGo Spokesperson

Industry-Wide Shift Toward Institutional Crypto Adoption

BitGo’s success reflects a broader trend across the financial sector: traditional institutions are actively integrating digital assets into their service offerings. Other major players have also made significant moves in Germany:

These initiatives highlight how legacy financial institutions are bridging the gap between traditional finance and the evolving blockchain ecosystem. Secure custody is foundational to this transition — without it, large-scale investment in cryptocurrencies remains too risky for regulated entities.

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Regulatory Challenges: Not All Success Stories Are Smooth

While BitGo’s approval signals progress, the path to licensing in Germany isn’t without hurdles. Even industry giants face setbacks.

In June, BaFin informed Binance — the world’s largest crypto exchange — that it would not be granted a digital asset custody license. The exact nature of the decision — whether a formal rejection or an informal indication during ongoing discussions — remains unclear.

Binance has stated it will not disclose details of its conversations with German regulators but reiterated its commitment to complying with BaFin’s requirements. The exchange described the process as detailed and ongoing, expressing confidence in its team and internal controls to address regulatory concerns.

This contrast between BitGo’s approval and Binance’s stalled application illustrates the importance of proactive compliance, local entity structuring, and sustained engagement with regulators — not just technological capability.

Key Takeaways for Crypto Firms Eyeing Europe

For companies aiming to enter or expand within Germany’s crypto market, several lessons emerge:

  1. Long-term commitment matters: Regulatory approval takes time. BitGo spent years operating under transitional rules before earning full licensure.
  2. Local presence is critical: Establishing a legally registered entity within Germany (like BitGo Deutschland GmbH) demonstrates seriousness and facilitates smoother oversight.
  3. Compliance infrastructure is non-negotiable: Robust AML/KYC systems, cybersecurity protocols, and audit trails are essential for passing BaFin scrutiny.
  4. Institutional focus drives approval: Regulators favor firms serving professional investors over retail-focused platforms, especially when risk management is prioritized.

Frequently Asked Questions (FAQ)

Q: What does a cryptocurrency custody license allow BitGo to do in Germany?
A: It authorizes BitGo Deutschland GmbH to legally store and manage digital assets for clients, including holding private keys, executing secure transactions, and offering institutional-grade custody solutions under BaFin supervision.

Q: How does BaFin’s crypto regulation compare to other EU countries?
A: BaFin is considered one of the strictest but most predictable regulators in Europe. While countries like France and Malta were early adopters, Germany stands out for integrating crypto rules into existing financial laws, giving them strong legal enforceability.

Q: Can other crypto companies apply for a similar license in Germany?
A: Yes, but applications are thoroughly reviewed. Companies must prove financial stability, operational resilience, compliance frameworks, and qualified management teams. Many opt for the transitional regime first, like BitGo did.

Q: Does this license cover trading or only custody?
A: The license covers custody services only. Trading activities would require separate authorization or partnership with a licensed broker or exchange.

Q: Is Germany part of the EU’s MiCA framework?
A: While Germany follows national regulations today, it will eventually align with the EU-wide Markets in Crypto-Assets (MiCA) framework once fully implemented. However, BaFin’s current rules already set a high bar for compliance.

The Road Ahead: Building Trust Through Regulation

BitGo’s licensing milestone isn’t just a win for the company — it’s a signal to the global market that well-regulated, transparent crypto custody is achievable in one of Europe’s most important economies.

As more institutions seek exposure to Bitcoin, Ethereum, and tokenized assets, secure and compliant custody solutions will remain in high demand. Germany’s balanced regulatory approach may serve as a model for other nations navigating this complex terrain.

With increasing scrutiny on security, anti-money laundering practices, and consumer protection, firms that invest early in compliance — like BitGo — are best positioned to lead the next phase of crypto adoption.

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Core Keywords:

By aligning with strict regulatory standards and focusing on institutional needs, BitGo has not only secured a foothold in Germany — it has helped raise the bar for trust and professionalism across the entire digital asset industry.