Money Laundering Challenges in Germany

AML Certification in Germany

Certified Anti-Money Laundering Professional (CAMP) is one of the best international certification in AML domain. In order to take the course global, the team of Regtechtimes Academy entered into an agreement to offer the certification program to the global compliance officers. Regtechtimes Academy in association with Riskpro Learning offers the Certified Anti Money Laundering Professional (CAMP) program to the international community. This course was intially started  to address the provisions of Prevention of Money Laundering Act. Certified Anti Money Laundering Professional is an interesting experience for the compliance professionals.

Money laundering in Germany is becoming an on going problem. Germany is looking after to put forth the strong AML system. In Germany, the banks and financial institutions should fulfill the due diligence reuirement. To handle all this situation it is required for the citizens to understand that how the AML works. So it will be very beneficial for doing the CAMP course

Crypto and Money Laundering Regulation in Germany

A major problem to the analysis of the crypto asset and the related blockchain industry  has been and still there is lack of  guidelines as well as the legal definition. The money laundering challenge in Germany is creating a major problem in Germany. With the introduction of crypto assets in our lives recently, their use is becoming more and more common. With the increase of this use, the existing crimes in this area have increased, especially for money launders. The crypto sector has become a target. Crypto asset have principally no physical manifestation they exist exclusively as digital book entries in a virtual shared and distributed ledger.  However, regulators have made some regulations to prevent this crime. Regulations in this sector have started, especially with the regulations of the European Union.

Germany is currently in the process of transposing into its domestic law the amendment of the European Union’s Anti- Money Laundering Directive (5AMLD) which provides the customer due diligence requirement to custodian wallet providers.  One of the European Union regulations is 5AMLD. EU Member States should implement the 5AMLD EU legislation by 10th January 2020.  It requires stricter rules to combat money laundering. With the Fifth Anti Money Laundering Directive, crypto-asset traders and crypto wallet providers subject to AML obligations of the European Union member states have been included.

What is Crypto Asset 

A cryptocurrency  is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. It is protection of crypto assets for others, management, and protection, or special “crypto protection” activity has been found in an application that serves to hold, store or transfer crypto assets.   Therefore the following parties have been regulated and supervised by BaFin in relation to crypto-assets:

  • Consultants
  • Brokers/dealers
  • Insurers
  • Portfolio managers
  • Custodians of private keys to access wallets
  • Wallet providers
  • Nesting agents

Use of Virtual Currencies

Virtual currencies (VCs) – which include cryptocurrencies such as Bitcoin, as well as a range
of other digital value-transfer methods – are innovative new technologies that enable digital transactions and the delivery of financial products and services in new online networks, environments and marketplaces. Cryptocurrenciesfunction as a form of ‘digital cash’ by enabling P2P, direct transfers between two parties,much as two people could exchange physical fiat currency, but without the same limitationsof space and distance.

How 5AMLD is affecting crypto service providers

Fiat currencies registers crypto traders of 5 AMLD.  Besides, the license requirement in Germany also covers crypto trading. Crypto significant figures mostly welcome the new regulations and view them as a great tool to bring more professionalism into the industry through heightened transparency and the exclusion of “shady” business.

German Federal Ministry of Finance Advisory Document

The existing literature on the German Federal Ministry of Finance (BMF) is rather incomplete. The consultation document of the Federal Ministry of Finance suggests that German law should often be opened to electronic securities. However, it will not be necessary to issue securities electronically. In addition, the Ministry of Finance suggests that regulation should be technology-independent. Therefore it should  not be privileged, especially in terms of blockchain technologies consuming too much energy and affecting the environment.

The Securities Trading Act states that  that the tokens should not generally be classified as securities, investment assets, and not as electronic securities. Therefore, there is no obligation to publish a prospectus or information sheet for the public offering of benefit tokens. The recommendations of the European Securities and Markets Authority (ESMA) on ICOs.

Reducing the ML risks of Crypto Exchanges in Germany

After the realization of the money laundering risks faced by crypto exchanges, AML regulators, as we mentioned above, took action and issued AML recommendations and obligations for crypto exchanges. Money laundering challenge in Germany is reducing the risk of crypto exchanges. In the process, some regulators have issued new AML regulations for crypto exchanges. While some regulators have included crypto exchanges in existing AML regulations and laws. However, in Germany, crypto service providers like other banks and financial institutions must have an Anti-Money Laundering compliance program. According to FATF and EU standards, the key to an AML compliance program is the “risk-based approach.”

Crypto exchanges should perform customer account openings under AML and KYC requirements, according to regulatory recommendations.   Not every customer is at the same risk, so Customer Due Diligence (CDD) procedures are important. CDD is the process of controlling the customers and collaborators of crypto exchanges in Germany. As a result, Crypto exchanges need to make a risk assessment by applying CDD procedures.


In order to counter increasing AML/CFT threats related to cryptocurrencies, regulators across the globe have come up with rules and recommendations for firms dealing in these currencies. While some regulators have included crypto exchanges and wallet companies under the purview of existing AML regulations, some have issued new regulations for them. In this process, some regulators have issued new AML regulations for crypto exchanges, while some regulators have included crypto exchanges within existing AML regulations and on the AML compatibility of crypto exchanges is not finished.  In the virtual currency world, Transaction Monitoring tools that automatically monitor customer behavior allow crypto exchanges to detect suspicious transactions.