Germany’s Financial Watchdog Orders Crypto Firm To Cease Trading Operations

Germany’s Federal Financial Supervisory Authority (BaFin) has ordered crypto trading firm Crypto-Capitals to immediately cease cross-border proprietary trading on its platform.

Crypto-Capitals, operated by UK-based Finatex Ltd., offers options and contracts for difference (CFD) on shares, indices, currencies and commodities. The company claims that its “cutting-edge platform offers everything an aspiring crypto trader needs to delve in the world of global markets with a single goal in mind – increasing ROI with reasonable outlay.”

In its notice, BaFin said that Crypto-Capitals is offering crypto-focused trading products without complying with the German financial legislation, including the German Banking Act.

“In facilitating customers’ access to the options and contracts offered, the company is conducting proprietary trading within the meaning of section 1 (1a) sentence 2 no. 4 (c) of the German Banking Act (Kreditwesengesetz – KWG) as a service for others in the Federal Republic of Germany,” the regulator said. “However, it does not hold the authorization required under section 32 (1) of the KWG.”

Earlier this year, BaFin published a statement outlining the way cryptocurrencies such as bitcoin and related investments should be classified. According to the watchdog, a case-by-case assessment is required to determine a token’s legal classification. BaFin clarified that if a token meets the criteria for a financial instrument or security, it could fall under supervisory requirements being applied to a market participant.