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On June 17, 2021, the German Federal Ministry of Finance (BMF) published a draft of a BMF letter on the income tax treatment of tokens in general and virtual currencies such as Bitcoin in particular, which was coordinated with the supreme tax authorities of the German states. The later finalized BMF letter is intended to provide practitioners in administration and business and individual taxpayers with a guideline on the income tax treatment of tokens and virtual currencies. The content confirms the approaches already taken in the taxation practice of many […]

Cryptocurrencies, are increasingly gaining attention from private and institutional investors. The flagship of all cryptocurrencies is still Bitcoin. Compared to today, this “digital currency”, which was already launched at the beginning of 2009, still had a somewhat niche existence at a price of less than € 1,000 at the end of 2016. After a highly volatile development, Bitcoin was listed at over € 54,000 at the beginning of 2021, but has been subject to strong fluctuations in value since then. Meanwhile, there are more than 10,000 other cryptocurrencies (so-called altcoins), […]

With the aim of improving the German fund location’s future and international competitiveness, domestic Special AIFs with fixed investment conditions are to be able to invest up to 20% of the fund’s assets in Crypto-Assets (Sec. 1 para. 11 sentence 4 of the German Banking Act (KWG)) from July 1, 2021. This is provided for in the government’s draft of the so-called Funds Location Act (FoStoG), which is intended to implement corresponding amendments to the German Investment Code (KAGB) and the German Investment Tax Act (InvStG). The German Parliament (Bundestag) passed this law on 22 April 2021 The Federal Council (Bundesrat) is expected to give its approval before the end of May 2021.  This new regulation could not only result in significant new investments, but also contributes to the steadily growing acceptance of Crypto Assets in Germany as investment objects in high demand worldwide. However, the acquisition of Crypto Assets for mutual funds will not yet be permitted.

The Swiss canton of Zug is already known as “Crypto Valley”. Numerous blockchain and crypto companies have already been able to find an ideal environment there and the settlement of further companies is being intensively advertised. Private investors also have the opportunity to collect profits from the sale of cryptocurrencies tax-free. Now the canton of Zug has taken the next step and is opening up the way for companies and citizens to pay their taxes with Bitcoin or Ether. This is an excellent example of how quickly states can adapt to developments and use them for their own benefit.

Crypto assets have now also arrived in sports. Sports clubs, which have been battered by Corona, see so-called Fan Tokens as a way to both achieve a positive financing effect and build stronger ties with fans. For example, fans can buy the tokens on exchanges and trade them. In addition, fans can use these tokens to have a say in various club issues, such as which artwork should hang in the team’s locker room. This is what happened, for example, with FC Barcelona, which raised over $1 million within an hour by issuing its fan tokens. The development in this field is rapid, as more and more clubs, racing teams, etc. discover the opportunities that fan tokens offer to them and their fans.