German (EU) regulatory requirements for decentralized data exchanges

Name of Project

German (EU) regulatory requirements for decentralized data exchanges


Evaluate the regulatory requirements for operating decentral data exchanges in Germany (and Europe). Data Exchanges with financial transactions and the emission of data backed assets will most certainly fall under the scope of the German financial supervision authorities (Bundesaufsicht für Finanzen, BAFIN).

What is the problem solved?

The European financial market has been harmonized in the past years. As part of the “Markets of Financial Instruments Directive (MiFiD)” it is now mandatory within the European Union to publish product information letters describing the nature and the risk of financial products. While it is highly likely to be required for any European data exchange that emits data backed crypto assets we still want to officially confirm this and other legal requirements like the Anti-Money Laundering Directive (AMLD) with the regulators.

What is the final product/result

As a result of the DAO round we will get in touch with the BAFIN and if necessary other authorities to validate and document the legal requirements to operate a decentralized data exchange within the EU.

Related Initiatives

The just recently published “Data Strategy of the German Federal Government” explicitly supports the “exchange with business associations and supervisory authorities for
data protection compliant AI and blockchain solutions.” Being a member of the German AI Association ( not just gets all required stakeholders involved in the process but it can help to get more attention from the German Financial Supervision Authorities (BAFIN).

How does this project drive value to the Ocean ecosystem?

Already in 2019 the German Government published its “Block Chain Strategy”. Germany is currently a frontrunner in the regulation of blockchain based technology, Fintechs and AI in Europe. While regulations might initially be considered to be a drag factor, integrating the Ocean plattform into the legal framework of one of the most regulated markets in the world is a significant competitive advantage mid- to long term. It will not just help to gain public trust in decentralized trading platforms, it will also act as a lighthouse project for the integration of decentralized platforms with the classic financial regulators.

Mid term goal

The approval by the financial authorities in one EU country gives financial products and solutions access to the EU-Market as a whole. Therefore the ultimate goal is to get approval by the BAFIN fo the Ocean Market. Depending on the outcome of this round a potential next step for an upcoming DAO round could be the alignment and creation of such a reference product information letter which can be used as a template for the German Financial Supervision authorities.

Long Description

(ruthlessly copied from the article below…)

“Germany’s implementation of this blockchain strategy during 2020, in addition its implementation of the European Union’s 4th Anti-Money Laundering Directive, has had far-reaching consequences for blockchain startups, fintech firms, banks, crypto exchanges and industrial companies. As of Jan. 1, 2020, the custody of crypto assets — and thus, also their trading — requires a license from the nation’s Federal Financial Supervisory Authority, known as BaFin. This license applies to all companies that hold or trade crypto assets such as Bitcoin (BTC) and Ether (ETH), from crypto custody providers to crypto exchanges. Thus, from 2020 onward, the handling of crypto assets in Germany is subject to high regulatory requirements and standards that have already been in place for decades in traditional capital markets.

One of the most important regulatory measures in 2020 was the law on the issuance of electronic securities, which was passed by the Federal Cabinet in December. According to this law, securities can also be issued purely electronically in Germany in the future.

Another important step in the direction of regulation was when the European Commission presented legislative proposals on crypto securities in September 2020. Its Regulation on Markets in Crypto Assets, known as MiCA, is expected to come into force in 2022 and create legal clarity and certainty for issuers and providers of crypto assets throughout the European Union.”

Proposal Wallet Address

The grant will be shared 50/50.


Once the Ocean Marketplace moves to the “white capital market” a great influx of investors and publishers can be expected, all across Europe. Since regulators are not the fastest moves and lawmakers need time to proper evaluate, we think this will take at least a few months, if not longer once the process has been started, thus we start very conservative in our ROI calculation.

An average publisher/data service provider can be considered to have a higher stake in the market than an average user. Based on the time horizon and growth of the market approx. 30.000 $Ocean for a potential new publisher.

Publishers Total Value Locked (TVL) about 30.000 * 100 = 3.000.000

An average high quality data pool can be estimated to have at least at TVL of 100.000 $Ocean over a year. To calculate this for 100 publishers we assume three pools per publisher.

Pools Total Value Locked (TVL) about 300.000 * 100 = 30.000.000

Trade volume will generate network revenue. While it is difficult to predict the total usage over a year we add another 1.500.000 on network revenue over the course of a year.

Bang: 3.000.000 + 30.000.000 + 1.500.000 = 34.500.000

Buck: 10.000 (+ following DAO funding rounds until end of year)

Chance of Success: 50% (something will be decided by BaFin, but it might take time)

Roughly estimated ROI over a year: 3450 * 0,5 = 1725

The Team

Kai Meinke, Product Owner, Ocean Protocol Ambassador, Economist and Global Citizen from Kiel, Germany

Tobias Manthey
Role: CEO & founder Evotegra, Regional Manager German AI Association, Teamlead AI, Software Developer
Twitter: @evotegra

Founder at Evotegra GmbH
The initial focus of Evotegra GmbH in 2001 was software integration in the asset management and investment banking industry. In 2013 I published my traffic sign detection app AcoDriver which shifted our focus to AI and image processing in automotive and industry. Today we are a provider for individual visual perception solutions based on AI/Deep Learning with a focus on embedded systems and real-time processing.

Articles and Links:

The blockchain strategy of the German federal government:

The Data Strategy of the German federal government:

Information of the BAFIN related to the legal requirements of blockchain technology:


I like this proposal as even operating a dataset on the marketplace right now is in a legal grey zone. So more concrete information about that is an important step forward for business and government adoption of the protocol.


Without legal security no major company or institution will operate a market. Therefore I think this is mandatory for mass scale adoption to go through this process. But looking at the strategy of the German Federal Governent related to Data Econmy, Blockchain and AI I see a high potential of support.

1 Like

This is great!! Very much in line with the question I brought up to Trent at the last Town Hall regarding standard licenses for sharing data.

A key take-away from that conversation is that there is a lot of room for innovation here, especially if various licenses are crowd-sourced in development with expert advisors weighing-in and guiding the conversation. A series of webinars or expert town hall meetings could go a long way towards catalyzing discussion.

A key step here would be to make contact with institutional law practitioners in IP regulation. An analog in the US would be the office of Data Science and Strategy at NIH. I’m not sure what the structure in Germany would look like.

Also some other notes from my conversation with Trent. I apologize if I didn’t catch everything, he was rapid firing information and I could only pay attention and note take so well xD

  • Ocean Market v3 now has a specification of terms and conditions, note the time frames
  • License information can be specified in the DDO as meta data with tons of flexibility
  • Look at other data marketplaces! i.e.) What is Rarible doing?

I hope this helps! I think as droll as it may seem the regulatory framework surrounding IP is perhaps the most important for bootstrapping international data marketplaces.


@tmanthey Tobias might you be able to provide an update to your proposal with a Bio for the community? Thanks.


John Doe

Role: developer, UX/UI designer

Co-founder at xxx
Lead developer at yyy

1 Like

I updated the proposal with a short bio.