Regulations

Germany’s financial watchdog stops a British-crypto company on its tracks

A British-crypto company has attracted the scrutiny of Germany’s financial watchdog due to regulatory concerns.

The British firm, Fanatex LTD, based in the United Kingdom, has been ordered to immediately restrain itself from offering international ‘proprietary trading.’

BaFin, the federal financial watchdog in Germany, indicated that Finatex LTD, through its trading platform:

“Offers options and contracts for difference (CFDs) on shares, indices, currencies, and commodities. In facilitating customers’ access to the options and contracts offered, the company is conducting proprietary trading within the meaning of section 1 (1a) sentence 2 no. 4 (c) of the German Banking Act (Kreditwesengesetz – KWG) as a service for others in the Federal Republic of Germany. However, it does not hold the authorization required under section 32 (1) of the KWG.”

Apart from offering services against the law, the company has intentionally displayed social media accounts on its website which are non-existence.

Late last year, BaFin warned investors from crypto related investments especially Initial Coin Offerings noting that the investors assume all risks posed by such activities. Therefore, the regulator warns, it is upon the investors to do thorough background checks before investing. BaFin also distanced itself from personal data loss or breach that the investors may encounter.

In June this year, the federal financial regulator intensified its warning against ICOs saying that BaFin is not mandated to guard individual ICO and crypto investors against risks but to provide a comprehensive general ‘financial stability.’

As reported by Cointelegraph, BaFin’s president, Felix Hufeld said that:

“We will not be able to protect every single investor from his fate, and that cannot be the task of state supervision. Once again, the maxim is that we must act prudently or regularly if financial stability as a whole is threatened or if consumers are systematically harmed.”

Do you think Germany’s financial watchdog will continue scrutinizing firms offering crypto-related services to protect investors from being defrauded?

Let us know your thoughts in the comments section below.

coinmag

Philip is an experienced blogger keen on staying updated with trends and news surrounding the blockchain and Bitcoin space. With several years of freelance experience in various industries, Philip brings his knowledge and experience into the crypto space.

Leave a Comment

Your email address will not be published. Required fields are marked *