eToro stops crypto custody service in Germany

Israeli social trading and multi-asset brokerage company, eToro, has announced a major change in the custody of crypto assets for its customers in Germany.

Starting from January 21, 2024, the custody of these assets will be transferred to Tangany GmbH, a Munich-based crypto custody service provider overseen by the German Federal Financial Supervisory Authority (BaFin).

Following this transfer, eToro Germany will cease its crypto custody services. However, customers will still be able to sell or transfer their crypto assets to another custodian through the eToro platform. But transferring assets to another custodian means they can no longer be sold via eToro, the statement explains.

Customers not wishing to use Tangany’s services have the option to sell their crypto assets on eToro by January 21, 2024, or transfer them to an external wallet by January 15, 2024. The migration process involves temporarily disabling the ability to sell or close positions during the transfer, including the eToro Wallet function.

The transfer process is set to begin on January 21, 2024, and is expected to be completed by January 29, 2024. During this period, customers will not be able to access their crypto assets.

There are exceptions for certain crypto assets, namely NEO, FIL, THETA, and LUNA, due to technical reasons. These will not be transferred to Tangany. If customers hold assets in these currencies, they must sell them or close their positions by January 20, 2024. After this date, these assets will be sold automatically, and the proceeds credited to the customer’s eToro account.

(M)IOTA assets will also be treated differently. They can be converted into Wrapped IOTA on the Binance Smart Chain and then transferred to Tangany. If customers don’t want this conversion, they should sell their (M)IOTA by January 20.

eToro said that the transfer to Tangany provides secure and compliant custody services for crypto assets. There are no fees charged for custody by Tangany or for the migration. However, fees will apply for the usual trading activities on eToro and for withdrawals from Tangany’s custody.

The official statement concludes that staking will no longer be available, and the acquisition of new crypto assets via eToro remains suspended.

Germany has been creating a friendly environment for crypto custodians, passing laws that allow banks and crypto specialists to manage digital assets and offer related services. However, the regulatory landscape remains challenging, as seen with Binance, the world’s largest cryptocurrency exchange, which was compelled by the German regulator to withdraw its application for a crypto license.