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German Institutional Funds Free To Invest Up to 20% In Crypto Assets


  • The law is set to draw in billions of euros within the cryptocurrency market.
  • Presently, Spezialfonds administers 1.8 trillion euros.
  • Germany permits institutional funds (nearly 4000) to invest through 20% of cryptos such as Bitcoin, Ethereum, and more.
  • Binance to cease deals on derivatives and futures.
  • BaFin- Germany’s Financial Regulator, and Malaysia have contributed to the endeavors faced by the Binance.

The Fund Location Act, also known as Fondsstandortgesetz, governing spezialfonds was introduced in April. On 22nd April, Bundestag- the German Federal Parliament passed the legislation.

From 2nd August, the law empowering existing and fresh spezialfonds (domestic special funds) to direct up to 20% towards cryptocurrency came into effect.

Legalizing a holding percentage has allowed more phenomenal opportunities for the institutions, adding up to a fifth of their managed fortune.

It has resulted in spezialfonds pulling off 1.8 trillion euros (approx 2.1 trillion euros) in institutional funds. This puts forth that assigning a 20% can orient over $400 billion into cryptocurrency projects.

A crypto expert at BVI, Tim Kreutzmann, claimed a high probability that a significant segment of the funds would hit below the 20% threshold. The market anticipation and execution could be two reasons behind it. In addition, these funds are only accessible to institutional investors via sources such as pension and insurance funds.

At the same time, Germany is one of the few European nations to block derivative products. As a result, Binance, a leading international cryptocurrency exchange, plans on cutting out the opening of futures accounts for countries such as Germany, the Netherlands, and Italy, with immediate effect.

Although Binance no longer markets actively traded derivatives and futures on a local scale, it intends on lowering their access. Starting from 30th July, users have a total of 90 days to terminate any open derivative deals.

A straightforward explanation of Binance’s decisions could be the continuous push coming from the regulatory. As a result, Malaysia earns a top spot being the ultimate nation probing them.

The nation’s Securities Commission has released a notice allowing 14 days to the exchange for deactivating the site,, and halting all the exchange executions.

BaFin’s Operations

Germany’s Financial Regulator, BaFin, has authorized cryptocurrency holdings for institutional funds despite its hesitancy. Being a financial guard, It has been concerned about the volatility and risks that a cryptocurrency market delivers. This shift in behavior accentuates that the regulator aims at supporting the progress in financial advancement.

BaFin has also contributed to the endeavors faced by Binance. The first regulatory body to take up grievances with them after releasing stock tokens back in April.

The regulators deemed the stock token as securities and sought a prospectus. However, a matter that began with an inquiry ended up getting the stock tokens withdrawn.