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Germany applies EU-level AML/CFT rules to CASPs via the GwG transposing AMLD5/6, plus MiCA-linked authorisation under Regulation (EU) 2023/1113 (Travel Rule) effective since December 2024. CASPs authorised under MiCA are subject to the same AML/CFT requirements and supervision as credit and financial institutions. Germany's 2022 FATF Mutual Evaluation found VASPs generally have good understanding of ML/TF risk among larger firms, though BaFin was noted as able to take a more proactive approach to unlicensed money/value transfer providers.
FATF's 2022 Mutual Evaluation Report of Germany found that larger financial institutions and VASPs generally have a good understanding of money-laundering and terrorist-financing risks and their associated obligations -- a positive baseline finding for institutional compliance capacity. The same evaluation, however, identified a supervisory gap: BaFin could take a more proactive approach to identifying unlicensed money/value transfer service providers, particularly hawala-type operators, suggesting that informal or unlicensed value-transfer channels may sit outside BaFin's most effective supervisory reach even as licensed CASPs and banks are well-covered.
Sanctions enforcement operates through a parallel but connected track: BaFin has authority to grant access to funds frozen under the KWG, and AWG (Aussenwirtschaftsgesetz) orders prohibit making funds or economic resources available to designated persons or entities as soon as an EU sanctions designation is published. This sanctions-freezing mechanism was corroborated by FATF's follow-up report on Germany. On the enforcement side, BaFin's seizure of 13 unlicensed crypto ATMs across 35 locations -- justified in AML terms by the money-laundering risk posed by unlicensed cash-to-crypto conversion points, and resulting in the confiscation of close to EUR 250,000 in cash -- demonstrates active supervisory follow-through against unlicensed operators specifically, even as the broader hawala-style gap identified by FATF remains open.
Outlook
Germany's AML/CFT framework for licensed CASPs is mature and closely aligned with EU-wide standards, with an active enforcement track record against unlicensed operators. The open question flagged by FATF -- BaFin's posture toward unlicensed money/value transfer providers and hawala-type channels -- is the most likely source of any near-term supervisory tightening, and is also the clearest connective thread into financial-integrity monitoring of informal value-transfer risk in the German market.
no periodic updates on record for this sub-brief
Sources and findings (5)
- T1 · European Banking AuthorityRegulation (EU) 2023/1113 — Reg (EU) 2023/1113 entered into force June 2023, extending originator/beneficiary information obligations to CASPs and amending Directive (EU) 2015/849 to subject MiCA-authorised CASPs to the same AML/CFT requirements/supervision as credit and financial institutions.retrieved M5bindingin forcenew
- T1 · FATFGerman VASPs/banks — Larger financial institutions and VASPs in Germany have good understanding of ML/TF risks and obligations per FATF's 2022 Mutual Evaluation Report of Germany.retrieved M3bindingin forcenew
- T1 · FATFBaFin / AWG framework — BaFin has authority to grant access to funds frozen under the KWG; AWG orders prohibit making funds/economic resources available to designated persons/entities under Germany's sanctions framework.retrieved M4bindingin forcenew
- T4 · CoinDeskBaFin — BaFin seized 13 crypto ATMs across 35 locations because operators lacked required permission and posed money laundering risks, confiscating almost EUR 250,000 in cash.retrieved M3bindingin forcenew
- T1 · FATFBaFin — BaFin could take a more proactive approach to identifying unlicensed money/value transfer service providers, especially hawala operators, per FATF's Mutual Evaluation of Germany.retrieved M2non-bindingnew