BaFin Warns of Crypto Exchange CoinBene on Alleged Hiring in Germany

Germany’s financial watchdog BaFin has published a statement warning of the activities of crypto exchange CoinBene, which was flagged for allegedly offering cryptocurrency-focused trading products without complying with its financial legislation.

CoinBene is currently sitting as one of the top 10 crypto exchanges worldwide. According to CoinMarketCap, it has over $1.7 billion in 24-hour trade volume and ranked currently as the 8^th biggest crypto exchange.

BaFin said ‘Coinbene LTD Germany’ is not registered in the country’s commercial register. It also accuses the company of hiring ‘freelancers’ to trade Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term on behalf of its users in exchange for commission Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term.

The watchdog further explains: “The freelancer should provide his or her own bank account and perform trades prescribed by the company through cryptocurrency trading platforms. Cryptocurrencies are usually financial instruments. Trading in financial instruments on behalf of customers is subject to authorization under the KWG.”

In turn, CoinBene has come out to assure its users that all claims about hiring in Germany or opening offices there were completely untrue, which implicitly means that BaFin’s warning makes no sense.

Speaking via an update on Twitter, CoinBene responded to inquiries from its users about alleged hiring activities in Germany; it said “This is to announce that CoinBene is not planning to open any office nor hiring any staff or representative in Germany. Nonetheless, we would like to thank those who actively reached out to us for your concern and understanding.”

Hack rumors back in March

In the statement, the exchange pointed out that the news was simply unfounded, and also posted an image showing the fake advert that triggered the latest wave of controversy and led to the regulatory warning.

Earlier in March, CoinBene was the latest crypto exchange that has been rumored to be hacked, but the exchange quickly responded, denying the hack rumors and explained that they had put wallets under maintenance in order to upgrade the platform, which had an effect on deposits and withdraws.

The news came up right after a study from San Francisco based Bitwise Asset Management claimed that unregulated exchanges like CoinBene inflate trading volume compared to regulated exchange like Coinbase. The study concludes that nearly 95% of all reported trading in bitcoin is artificially created.