Business 11 months ago

Ed Drake

Financial regulator shuts down German crypto brokerage

Germany’s financial regulator, the German Financial Supervisory Authority, has issued an order shutting down the financial brokerage arm of a Berlin-based cryptocurrency exchange in a move that could indicate the regulator adopting a tougher stance on cryptocurrency businesses in the country.

BaFin, which is tasked with overseeing markets and the broader financial system in Germany, decreed that Crypto.exchange GmbH must immediately cease acting as a financial broker, following announcements made on one of the company’s websites.

On its btc-now.de site, Crypto.exchange offered to sell bitcoins for euros, with the firm then selling the cryptocurrency on exchanges. The company was claiming to forward money to its customers within 30 minutes, as part of this alleged brokerage process, according to the regulator.

BaFin said Crypto.exchange is not licensed to operate this type of service, and concerns were raised initially when several customers reported that they had failed to receive payment as part of their transactions.

According to a translated statement from the regulator, Crypto.exchange has gone outside of the terms of their licensing in operating a financial commission business, a regulated activity in its own right.

“The company advertised on the Internet – including on the site www.btc-now.de – to exchange Bitcoin in euros. It claimed to have been audited by the BaFin. Investors should transfer their bitcoins to the company, which in turn wanted to sell them on a stock exchange. The purchase price achieved there should be transferred to the investors within 30 minutes,” the regulator said. “As a result, Crypto.exchange GmbH operates a financial commission business. The BaFin expressly understood that the company operates against its own advertising, and without the required authorization by the BaFin.”

The move comes as only the latest steps taken by the German regulator to tighten up the cryptocurrency sector there.

Back in April 2017, the regulator took action against payment processors involved in the notorious OneCoin cryptocurrency, a project that has come in from strong criticism from analysts and regulators alike.

In the weeks following a decision by Italian authorities to fine OneCoin in the order of €2.6 million ($3.2 million), the BaFin ordered connected companies in Germany to ‘dismantle’ the parts of their business that dealt with OneCoin at the time.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Satoshi Vision (BSV) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BSV is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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