KMAG (German Crypto Markets Supervision Act)
Germany’s act accompanying the EU’s MiCA regulation. It makes BaFin the competent supervisor, makes providing crypto services without authorisation a criminal offence and protects crypto-assets held in custody if the provider becomes insolvent.
AlsoCrypto Markets Supervision ActKryptomärkteaufsichtsgesetz§ 45 KMAGGerman MiCA implementation act
On the learning path: Stage 5 · Step 1 – Understanding custody
The Crypto Markets Supervision Act (Kryptomärkteaufsichtsgesetz, KMAG) of 27 December 2024 supplements the EU’s MiCAGlossaryMiCA (Markets in Crypto-Assets Regulation)The EU regulation on markets in crypto-assets. Since 30 December 2024, exchanges, brokers and custodians in the EU have needed authorisation; the last transitional period ended on 1 July 2026. MiCA regulates providers, not Bitcoin itself.On the learning path: Stage 4 · Step 2 – Choosing a provider →In the glossary → regulation in Germany. MiCA applies directly in all EU member states; the KMAG covers what each country has to decide for itself – such as supervision and penalties.[1]
Key points
- Supervision: BaFinGlossaryBaFin (Germany’s Federal Financial Supervisory Authority)Germany’s financial regulator, based in Bonn and Frankfurt am Main. In Germany, it is responsible for authorising and supervising crypto service providers under MiCA, and it warns about unauthorised offers.On the learning path: Stage 6 · Step 2 – Spotting scams →In the glossary →, Germany’s financial regulator, is responsible. It can take action against unauthorised business.[1]
- Penalties: anyone who provides crypto-asset services without authorisation faces up to five years in prison or a fine.[3]
- Insolvency protection (§ 45): crypto-assets a provider holds in custody for you are deemed to be yours – unless you have allowed the provider or third parties to dispose of them.[2]
What § 45 means for you
If a German custodian becomes insolvent, your bitcoin doesn’t form part of the insolvency estate; you can demand it back (known as Aussonderung, or segregation). This can take time, and § 45 doesn’t help against hacks, fraud or operating mistakes. If you use offers such as lending, the protection may not apply, because you then consent to the provider disposing of your assets.
Only self-custodyGlossarySelf-custodyYou hold the private keys to your bitcoin yourself – in your own wallet rather than with a provider. Nobody can freeze your bitcoin. But nobody can help you if you lose your seed phrase and keys.On the learning path: Stage 5 · Step 1 – Understanding custody →In the glossary → gives you full control – and full responsibility. More in Understanding custody.
Related terms
These terms are closely connected.
- This termKMAG(German Crypto Markets Supervision Act)
- MiCA (Markets in Crypto-Assets Regulation)The EU regulation on markets in crypto-assets. Since 30 December 2024, exchanges, brokers and custodians in the EU have needed authorisation; the last transitional period ended on 1 July 2026. MiCA regulates providers, not Bitcoin itself.
- BaFin (Germany’s Federal Financial Supervisory Authority)Germany’s financial regulator, based in Bonn and Frankfurt am Main. In Germany, it is responsible for authorising and supervising crypto service providers under MiCA, and it warns about unauthorised offers.
- CASP (crypto-asset service provider)A company that professionally provides crypto-asset services to customers – such as trading, exchange, custody or transfers. In the EU, every CASP needs an authorisation under MiCA.
- Deposit guarantee (deposit protection)Statutory protection for bank deposits: up to €100,000 per person and bank if the bank goes bust. It generally doesn’t cover bitcoin – and neither does investor compensation.
- Custodian (custodial)A provider such as an exchange or app that holds the private keys for you. Convenient, because support can help if you lose your password – but you don’t hold the bitcoin yourself and depend on the provider paying out.
Explained in depth
These articles go into more detail:
- ReferenceMiCA & regulationWhat MiCA, KMAG and BaFin mean for you: checking a licence in the ESMA register, insolvency protection, no deposit guarantee, the Travel Rule and AMLR from 2027.
- Stage 5 · Step 1Understanding custodyWho holds the keys to your bitcoin? Provider custody and self-custody compared – with the legal position under MiCA and KMAG and lessons from Mt. Gox, Celsius and FTX.
More from „Tax & law“
Sources3 sources · 1 publishers
The superscript numbers in the text refer to these sources.
- Kryptomärkteaufsichtsgesetz (KMAG) – Bundesministerium der Justiz (gesetze-im-internet.de), 27.12.2024 (accessed 28/09/2026)
- § 45 KMAG – Zuordnung verwahrter Kryptowerte, Kosten der Aussonderung – Bundesministerium der Justiz (gesetze-im-internet.de) (accessed 28/09/2026)
- § 46 KMAG – Strafvorschriften – Bundesministerium der Justiz (gesetze-im-internet.de) (accessed 28/09/2026)
This entry is for education only and is not investment, tax or legal advice.