UK Crypto Exchange Finatex to Dissolve Operations Per German Crypto Regulator Request
BaFin, the German Financial Supervisory Authority, recently shut down operations of Finatex Ltd., a UK-based cryptocurrency exchange. BaFin had ordered the exchange to “cease cross-border proprietary trading immediately” for its failure to abide by German regulations of receiving authorization to operate transaction across borders.
BaFin regulatory exercises its authority when it comes to cryptocurrency exchanges and their right to operate. Recently, the regulator prospected a company that operated without a wallet. Even though the Berlin Court of Appeals overturned BaFin’s closure decision, it simply reflects BaFin’s vigor in exercising its regulatory power.
BaFin’s efforts are further fueled by questionable practices concerning cryptocurrency firms in Europe. Many of them do not receive the necessary paperwork to operate or follow defined rules for trading digital currencies and bitcoin. Europe, as a whole, has been working to develop a widespread regulatory framework that will provide uniformity and will enable cryptocurrency profits, investments, and holdings.
Further, the Berlin Court of Appeals identified Bitcoin as a “financial instrument” and is thus subject to regulation. Felix Hudfeld of BaFin also warned investors of ICOs, stating
“We do not want to stifle innovation but must avert dangers at the same time. For example, it is important for us to take action against money laundering and safeguard the privacy rights of investors. In addition, there should be certain minimum standards for underlying terms of the contract.”
The German government also recently stated that overall, cryptocurrencies are not a threat to financial stability. The amount of cryptocurrency trading volume is very low compared to the size of the financial system and essentially, it is just important to monitor regulatory measures in relation to crypto.