German financial watchdog Federal Financial Supervisory Authority (BaFin) has issued a public warning to citizens against investing funds in Cayman-based Rtcoin.
In a strongly worded advisory, BaFin confirmed that it is investigating Rtcoin over alleged violations of the provisions of section 37 (4) of the German Banking Act. The Act provides that firms keen on offering banking services in Germany have to obtain a license and be supervised by BaFin.
“The company is not supervised by BaFin,” read the advisory. “The information provided on the company’s website, rtcoin.org, gives reasonable grounds to suspect that Rtcoin is conducting banking business and providing financial services in Germany without the required authorization.”
A look at BaFin’s database indicates a provision for companies from a signatory state like the European Union to merely notify the agency of their intention to provide cross-border service. However, Rtcoin is noticeably absent from all categorizations under BaFin’s database, but its website lists Germany as one of its service languages.
Rtcoin branded itself as “the world’s leading digital asset trading platform” and claims to have operation centers in the United Kingdom, South Korea, Italy, and Hong Kong. Despite the claim, a look at the U.K.’s Financial Conduct Authority’s (FCA) exclusive list of companies with either temporary or permanent registration fails to back up Rtcoin’s claim.
Rtcoin is noticeably absent in the FCA’s list of unregistered digital asset firms, while similar searches in other jurisdictions do not provide evidence of registrations.
“BaFin, the German Federal Criminal Police Office, and the German state criminal police offices recommend that consumers seeking to invest money online should exercise the utmost caution and do the necessary research beforehand in order to identify fraud attempts at an early stage,” read the statement.
The regulatory vice gets even tighter
Regulators across Europe are flexing their muscles to exercise tighter controls over the digital assets industry. The renewed effort comes at the back of the collapse of top projects in the ecosystem like FTX and BlockFi, and the need to prevent a repeat of the events.
U.K.’s FCA has been bolstered with oversight powers to regulate virtual currency promotions and ban firms that fail to meet the minimum requirements, while regulatory agencies in France, Italy, and Spain are pining for similar powers.
Securities regulators in the U.S., South Korea, and the Philippines are also adopting active stances by issuing a slew of public advisories against digital asset entities offering unregistered securities to the public.
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