GSK Stockmann advised the Munich-based Deutsche Finance Group on implementing an issuance structure for crypto securities under the German Electronic Securities Act. The project involved not only providing support during the first public offering of a crypto security with a transparency document approved by BaFin and one of the first authorisation procedures for a crypto securities registrar under the German Banking Act, but also structuring the fully digital processes and legal documentation for the digital investment platform and the crypto securities register.
Deutsche Finance Group is an international investment company offering investors access to institutional markets and exclusive investments in private equity real estate, real property and infrastructure. The company manages assets with a volume of 11.3 billion euros. Via its online investment platform www.mitinvestieren.de, Deutsche Finance Group is offering the first electronic security for private investors in Germany, for which a securities information sheet has been approved by the German Federal Financial Supervisory Authority (BaFin). The group company DF Deutsche Finance Systems GmbH is acting as the crypto securities registrar in accordance with the German Banking Act (KWG).
GSK Stockmann, with a team led by partner Tobias Riethmüller, provided Deutsche Finance Group with comprehensive advice on capital markets, banking regulatory, corporate and IT law with regard to the structuring and implementation of the project. In addition to advising on the processes and contractual documentation required under the Electronic Securities Act (eWpG), this also involved setting up the online investment platform including a fully digital subscription channel for crypto securities. GSK Stockmann partner Timo Patrick Bernau was responsible for the BaFin authorisation procedure for DF Deutsche Finance Systems GmbH under the KWG. In addition, GSK Stockmann is advising the issuing special purpose vehicles, which are also part of Deutsche Finance Group, on preparing the documentation required under capital markets law for the series of planned follow-on issuances of crypto securities.
A special feature of Deutsche Finance Group’s solution is that the entire value chain of securities issues is mapped within the group’s internal structure from conception and issuance, to settlement and investment brokerage. One focus of GSK’s legal support was on all the legal requirements that apply to crypto securities registrars under the Electronic Securities Act (eWpG), the Regulation on Requirements for Electronic Securities Registers (eWpRV), the German Banking Act (KWG), the Money Laundering Act (GwG), data protection law and other relevant regulations. In addition, the firm’s legal advice encompassed the design of the integrated digital processes and offline processes of the registrar and the intermediary company DF Deutsche Finance Capital GmbH as well as the parameterisation of the “smart contracts” on the Polygon blockchain where the securities are managed.
The innovative digital legal tech solution “GSK Hub” was used to coordinate the project and share documents with the client, which significantly increased efficiency when it came to the time-sensitive coordination and finalisation of the highly complex and extensive contract structure.
GSK Stockmann has once again shown itself to be a pioneer with this project and was able to draw on a tried and tested fintech advisory team. GSK Stockmann had previously advised on one of the first blockchain securities transactions in Germany back in 2019.
Advisers of Deutsche Finance Group:
GSK Stockmann: Tobias Riethmüller (lead, banking and capital markets law), Timo Patrick Bernau (banking supervisory law), Martin Hossenfelder (IT and data protection law); Associates: Maike Lutterbach (banking supervisory law), Patrick Wambold (banking and capital markets law, digital financing platforms), Tobias Bachmeier (banking supervisory law)