Germany’s Financial Watchdog Orders Crypto Trading Firm to Shut Down

Germany’s Federal Financial Supervisory Authority (BaFin), an independent regulatory institution, has recently ordered cryptocurrency trading firm Crypto-Capitals to shut down, as it was reportedly not complying with the country’s financial legislation.

According to Finance Magnates, Crypto-Capitals was seemingly offering cryptocurrency-focused trading products that included contracts for difference (CFDs). The regulator took the opportunity to advise the public to always verify a company’s identity before dealing with it, and to never trust one that “cannot be clearly identified.”

As the financial markets watchdog, BaFin has issued various advisories over the years, with some recent ones being directed at retail forex and CFDs products, Finance Magnates reports. Per the regulator, brokers should be providing their users negative balance protection, to help them avoid unlimited losses. As for cryptocurrency, it has recently issued warnings.

Just like other regulators throughout the world, BaFin has warned it’s risky to invest in bitcoin and other cryptocurrencies, as well as on initial coin offerings (ICOs). Per the regulator, these are risky investments over “unrealistic technologic claims” and scams in the industry.

The regulator’s warning comes are cryptocurrencies keep on growing in Germany. Last month, as CryptoGlobe covered, it was revealed 25,000 online stores in the country are set to start accepting cryptos in 2019. A survey conducted in May found, in fact, that 3 out of 10 in the country are considering investing in cryptocurrencies.

Per its results, the stats for those interested in cryptos rose to 46% when considering respondents aged 18 to 34. The head of Postbank’s Digital Department, behind the survey, pointed out at the time that the slide in crypto prices didn’t affect their popularity.

He stated, however:

Despite all the fascination, young investors should not lose sight of offers from the established banking system. Anyone who already makes an investment in securities as an investment should certainly not invest in cryptocurrencies because of the high risks involved. Because this type of investment is highly speculative.

Despite these developments, Germany’s second-largest stock exchange, the Boerse Stuttgart, was, as of August, creating an “end-to-end infrastructure for digital assets.”