Crypto Capitals Halts Bitcoin Trading Operations Due to Germany’s BaFin Raising Red Flags
Crypto Capitals is a company that has been offering crypto-trading products to investors in Germany, like CFDs. However, they have made no efforts to follow the financial legislation in the area, which has put it at a major risk. As such, the regulatory institution for Germany, the Federal Financial Supervisory Authority (BaFin) has red-flagged their activity, leaving it as a warning to other investors and companies.
In an effort to encourage the public to be more careful in their investments, BaFin took the opportunity to also advise them to take the time to verify the information that a platform provides, like any identifying details or registrations. If a company is unable to be clearly validated as the real thing, then the investor should look elsewhere.
This isn’t the first time that the German watchdog has managed to go after the illegal activities of allegedly cryptocurrency brokers. Their role is to monitory the actions that occur in the financial market, while still focusing on compliance with the regulations set forms. There have been many advisories over the years, particularly with the way that it approaches retail forex and CFDs trading. They prefer to focus their attention on the brokers that leave their clients unprotected, and that offer no balance protection.
Clearly, with all of the potential for hacking and other damage in the crypto industry, BaFin has been incredibly apprehensive. They continue to warn investors about the immense risks they are taking with any cryptocurrency, even when that crypto asset is 10 years old (Bitcoin). They also go after initial coin offerings (ICOs), which is understandable with the way that many fraudulent companies will steal the users’ fiat funds and disappear without a trace.
With their aggressive approach on regulation and protecting citizens, Germany is actively looking to monitor the crypto industry for anything that could put investors at risk. One of their most recent efforts is their collaboration with France to work on Bitcoin regulation. The topic has already been discussed in Argentina at the G20 summit, but there is plenty of opportunity to still make this regulation into a reality.