Growing Interest in the German Market After MiCA and Emerging Practical Issues
Since the full implementation of MiCA (Markets in Crypto-Assets Regulation) at the end of 2024, an increasing number of Korean crypto and fintech companies have been considering expansion into Germany and the broader EU market.
However, the appropriate market-entry strategy and regulatory burden can vary significantly depending on the business model selected under the MiCA framework.
One area that non-EU businesses frequently misunderstand is the reverse solicitation exemption. Article 61 of MiCA provides a limited exception where an EU client initiates, on its own exclusive initiative, a request for crypto-asset services from a third-country firm.
The scope of this exemption, however, is interpreted narrowly under the official guidance of the European Securities and Markets Authority (ESMA) and the supervisory practices of individual EU Member States.
This article outlines the legal framework and limitations of the MiCA reverse solicitation exemption, the supervisory approach of Germany's Federal Financial Supervisory Authority (BaFin), and the key market-entry strategies Korean companies should consider in practice.
Legal Framework and Limitations of the Reverse Solicitation Exemption
The reverse solicitation exemption under Article 61 of MiCA generally requires two conditions to be satisfied simultaneously.
First, the provision of the service must be initiated entirely at the client's own exclusive initiative.
Second, after providing the requested service, the service provider must not solicit or market additional services or products to that client beyond the scope permitted by the exemption.
In its reverse solicitation guidelines published in February 2025, ESMA clarified several important principles.
- Connection with advertising and marketing activities: If a provider's website, social media, online advertising, partner marketing, or other promotional activities are considered to target customers in EU Member States, the reverse solicitation exemption may not apply even where the customer subsequently contacts the provider on its own initiative.
- Restrictions on continued service offerings: After the initial service is provided on the basis of reverse solicitation, additional solicitation or marketing should not be directed at the same customer beyond the permissible scope. Otherwise, reliance on the exemption may cease to be available.
- Burden of proof: The burden of demonstrating that the conditions for reverse solicitation have been satisfied rests with the service provider relying on the exemption.
BaFin's Supervisory Approach and Practical Risks
Germany's Federal Financial Supervisory Authority (BaFin, Bundesanstalt für Finanzdienstleistungsaufsicht) has historically taken a conservative approach toward unauthorized business activities and inappropriate marketing, including during the transition to MiCA.
Germany did not provide an extensive MiCA transitional period, and regulatory requirements applicable to Crypto-Asset Service Providers (CASPs) are applied strictly.
Key risks for non-EU businesses include the following.
- English-language websites and social media: If a website or social media account is considered to target EU or German customers, it may become difficult to rely on reverse solicitation even if the customer later makes the first direct contact.
- Geographically targeted content marketing: Publishing content aimed at a specific EU Member State or providing services in a local language may be viewed by BaFin as marketing directed toward the German market.
- Indirect customer acquisition through partners or channels: Customer acquisition through German partners or agencies may fail to satisfy the requirement that the customer acted exclusively on its own initiative.
Under Germany's Crypto Markets Supervision Act (Kryptomärkteaufsichtsgesetz, KMAG), BaFin may also issue public warnings concerning unauthorized crypto-asset service activities, and such warnings may remain publicly accessible.
Comparison of Market-Entry Strategies for Korean Companies
At present, Korean companies considering entry into Germany may generally evaluate the following approaches.
| Market-Entry Strategy | Key Features | Suitable Where | Key Risks |
| Direct German Authorization | Obtain CASP authorization directly from BaFin | B2B services targeting institutional clients; establishing a strong German presence is important | Capital and internal control requirements; authorization costs |
| Passporting | Obtain authorization in another EU Member State and subsequently expand into Germany | EU-wide expansion is a priority; structural flexibility is required | German-targeted marketing may remain subject to BaFin supervision |
| Establishing Another Global Hub First | Enter a more favorable jurisdiction such as Singapore or the UAE before expanding into Germany in stages | Early-stage market validation; business-model flexibility is required | Delayed access to German institutional clients and local partnerships |
Reference: Article 61 of MiCA and ESMA Guidelines on Reverse Solicitation, February 2025.
Depending on the business model, companies may also be subject to AML requirements, electronic money regulations, securities regulations, and the Digital Operational Resilience Act (DORA) in addition to MiCA.
Accordingly, market-entry feasibility should not be assessed solely on the basis of a single regulatory framework.
Key Issues to Review Before Entering the German or EU Market
Companies considering entry into Germany or the broader EU market should review the following matters in advance.
- Whether the token or service falls within MiCA: Determine whether the service requires CASP authorization and whether the token constitutes an Asset-Referenced Token (ART) or E-Money Token (EMT).
- Potential applicability of reverse solicitation: Assess whether the company's current website, social media presence, and marketing channels could be interpreted as customer acquisition activities targeting EU clients.
- German business structure after passporting: If authorization is obtained in another EU Member State, determine whether subsequent marketing and sales activities directed toward German customers may still fall within BaFin's supervisory scope.
- Cross-regulatory review: Examine whether other regulatory regimes, including AML, DORA, electronic money regulations, and securities laws, may apply in addition to MiCA.
DECENT Law Firm German Desk
Entering the German and European crypto-asset markets involves more than determining whether a MiCA authorization is required.
A workable market-entry structure requires an integrated review of the regulatory classification of the business model, the scope of reverse solicitation, the practical limitations of passporting, and other potentially applicable regulatory regimes.
DECENT Law Firm's German Desk advises Korean crypto and fintech companies throughout the Germany and EU market-entry process, including:
- · MiCA applicability assessments
- · BaFin regulatory risk analysis
- · Passporting strategy
- · Reverse solicitation review
- · Local partner agreement structuring
If your company is preparing to enter the German or broader EU market, we recommend conducting a regulatory review from the business-model design stage, before commencing marketing or customer acquisition activities.