British Crypto Firm gets Shutdown Notice From German Regulator BaFin

An official announcement published by the German Federal Financial Supervisory Authority (BaFin),  put an order to partially cease the activities of UK based crypto firm Finatex Ltd. The German Regulator asked the firm to immediately stop the cross-border trading options available on its platform, Crypto-Capitals. The firm does not possess any clearance from the German Authorities, thus it’s illegal for them to pursue the trading without the required permissions.

The notice dated on Oct 2 states, the Finatex firm must cease all its trading since it does not have the approval of German Financial Legislation which also includes German Banking act.

The financial regulator pointed out, Crypto-Capitals offers options, contracts for difference (CFDs) on shares, indices, currencies and commodities. It portrays itself as one of the premium Cryptocurrency trading platforms. However, there are no accounts or associations with the social networks mentioned on its website.

BaFin has been quite regular in issuing public warnings regarding the cryptocurrency Industry, mainly focusing on Initial Coin Offerings (ICO) projects. The German Financial regulator has been vocal about the potential risks that ICO token posses. It believes, ICO investors take all the risks upon themselves due to lack of legal requirements and Transparency Rules.

In February there was an inevitable rise in queries from investors regarding the ICO tokens. BaFin clarified different obligations from the investors whose main concerns were, “whether the underlying tokens, coins or cryptocurrencies behind so-called ICOs are viewed as financial instruments within the area of securities supervision.”

BaFin on a Mission to Preserve General Financial Stability

In recent times, Bafin has urged the global community to bring in a combined effort to regulate the ICO industry. It is still unclear whether ICOs will remain a problematic issue or break into being a primary form of economy. But, being a financial regulator, BaFin is leaving no stones untouched to moderate it for the best.

Bafin in June made it very clear that their interest lies in the preservation of financial stability and not just protecting individual retail investors against increasing frauds.

Also Read: These Two Celebrities Just Got Sued For Promoting Fraudulent ICOs