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BaFin cracks down on crypto firm


The financial regulations in Europe are getting pretty heated up. Having Germany in the driver’s seat of the changes is no big surprise, pretty much anything that happens within Europe these days, Germany has something to do with it. This isn’t necessarily a bad thing, the Germans are famous for their efficiency and work ethics. However, in terms of strictness, a German financial regulator could be hell to work with. This was proven once more when BaFin (The Federal Financial Supervisory Authority) an independent German regulatory institution banned Crypto-Capitals to do pretty much anything. The company was offering crypto-based financial trading products. These products included the infamous CFDs and it’s well known that Germany has specific financial legislation, which BaFin found to have been violated by Crypto-Capitals.

It is pretty obvious that a financial regulator would go after an illegal company. However, some people believe that the watchdog has some kind of special hate for crypt-based companies as it keeps on enforcing the legislation to ridiculous levels. BaFin has addressed these allegations and specified that no matter what type of violation is noticed, be it noteworthy or insignificant, it will enforce the law to the fullest. Even though it is the user’s responsibility to determine the identity of the firm they choose, BaFin and any other regulator take it upon themselves to filter the market.

BaFin has been very active these last few months, trying to supervise the financial market and enforce compliance from the registered firms. The filtration didn’t seem to be enough so the watchdog also started relying on advisories. Numerous advisories have been given out to the public from the financial regulator, most recently it happened when BaFin announced their new relationship with retail Forex and CFDs trading. The heat was directed towards companies that didn’t feature a negative balance protection, which means that there was no limit to how much money a customer could lose from a trade.

The ban on Crypto-Capitals is not BaFin’s first “act of aggression” against cryptocurrency companies. The financial watchdog was persistent with its warnings about crypto firms, clearly trying to set the tone of danger and speculation. One of the biggest warnings it dished out to the public, was towards ICOs, in their words the activity was sketchy at best and a scam at worst.

The crackdown is just the beginning of worse things to come for crypto companies. Germany and France are teaming up to really do a number on the cryptocurrency industry as they try to push for a better crypto regulation Europe-wide.

About the author

Konstantin Rabin

Konstantin Rabin

Konstantin has been working in the financial services industry since 2011. He is over-viewing various updates in the technology, regulation, and market movements. He's passionate about games and has a cute cat named Dog.

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