The Bottom Line
- Crypto asset issuers and related parties in Germany now face specific, detailed requirements for the public disclosure of insider information, mirroring rules for traditional securities.
- Failure to comply with these new disclosure timelines and formats can lead to significant penalties from Germany’s financial regulator, BaFin, increasing litigation and reputational risk.
- Companies must immediately review and update their internal compliance policies, communication protocols, and employee training to correctly handle potential crypto-related insider information and avoid market abuse violations.
The Details
Germany’s Federal Ministry of Finance, in conjunction with the financial supervisory authority BaFin, has enacted the new Crypto Markets Notification Ordinance (Kryptomärktemitteilungs-Verordnung – KMMV). This ordinance provides the specific details for implementing § 36 of the German Crypto Markets Supervision Act. Its core objective is to apply the well-established principles of ad hoc publicity from traditional capital markets to the burgeoning crypto-asset space. By mandating the timely disclosure of price-sensitive information, regulators aim to prevent insider trading, enhance market integrity, and build investor confidence in the German crypto market.
The KMMV clarifies what qualifies as insider information in the context of crypto-assets. While the base law established the principle, this new regulation details the practical application. Information is considered “insider” if it is non-public, precise, and could significantly affect the price of a crypto-asset if it were made public. This could include unannounced partnerships, critical software vulnerabilities, major changes to a project’s roadmap, or decisions by large holders to liquidate their positions. The ordinance lays out the process for determining materiality and the required format for public announcements, ensuring that information is disseminated widely and without delay.
This German-specific regulation should be viewed as a national measure that aligns with the broader European Union framework, particularly the Markets in Crypto-Assets (MiCA) Regulation. While MiCA establishes a pan-European regime for crypto-asset markets, including rules on market abuse, member states retain the power to specify certain procedural details. The KMMV is Germany’s step to ensure its national supervisory practices are robust and in line with the spirit of MiCA. For businesses operating across the EU, this signals a clear trend toward more harmonized and stricter regulation of crypto markets, demanding a cohesive, cross-border compliance strategy.
Source
Bundesgesetzblatt (German Federal Law Gazette)
