Germany’s Federal Financial Supervisory Authority (BaFin) announced Monday its granting of crypto custody business approval to Coinbase Germany GmbH. The approval makes it the first company in Germany allowed to provide the newly introduced financial service, BaFin noted.
After hitting a session high of $236.46 on the news, Coinbase Global Inc (NASDAQ: COIN) shares jumped 4.36% to $234.07 at 10:38 am ET. At the end of the day, shares closed at $246.69, up 9.86% at 7.59 pm EDT.
Last year, Germany’s parliament passed legislation allowing firms to provide crypto custody and trading services. However, BaFin authorization was necessary for organizations to provide the newly recognized financial service.
Companies established by the beginning of 2020 needed to announce their intent for license application by end of March. As well, applications were to be submitted by end of November of the same year. This regime became the first of its kind in the European Union.
Coinbase’s application happened in late 2020, according to Carola Rathke of Eversheds Sutherland – legal advisor to Coinbase in Germany. She also added that the crypto custody license still required other applications and that these were in the “advanced stage”. BaFin will review all applications, and a decision will be reached in the next couple of months.
Meanwhile, BaFin is open to any questions from applicants. The Authority may also need to make certain inquiries or request access to certain company documents.
Coinbase Stock and BaFin Approval
With the license, Coinbase expects to localize their services and further advance them all over Germany. “We look forward to bringing a best-in-class crypto product offering coupled with secure localized experience to our German customers.” – Marcus Hughes, Coinbase’s Managing Director for Europe.
Also happening in tandem with BaFin’s approval is Binance’s regulatory misconduct. The exchange, one of Coinbase’s top rivals, has been ordered to close down in the UK and Japan. Already, Binance has withdrawn from Canada’s Ontario Province to evade probes from the Ontario Securities Commission (OSC).
For Coinbase, their latest approval is one among multiple actions aimed at regulatory discipline. In April, Coinbase went public on the NASDAQ via a direct listing. Since then, it has recorded 10.82% and 4.29% gains in 5 days and 1 month respectively.
Nevertheless, its current market cap is at $47.22 billion, almost half its initial $85.8 billion valuations on the first day on the US stock market. Additionally, shares are now priced at about 34% below their Nasdaq opening price of $381. Still, Coinbase continues to be among crypto exchange giants, ranking 3rd after Binance and Huobi Global, going by CoinMarketCap.