The German financial regulator, BaFin, announced a formal investigation against blockchains.de, a trading platform on Wednesday. According to the watchdog, the firm’s operators do not hold authorization under the KWG to conduct banking business or provide financial services in Germany.
Moreover, blockchains.de is not regulated by BaFin. The trading platform website states that the laws governing it are the Estonian ones, although its business address is located in London, United Kingdom.
“Based on the contents of the website blokchains.de, on the use of the top-level domain ‘de’ and on information and documents available to BaFin, there are grounds to suspect that the platform is being used to conduct banking business and/or to provide financial services in Germany without the required authorization. On blokchains.de, the operator of the website only refers to itself using the name Blokchains,” the authority noted.
The KWG requires authorization from companies conducting banking business in Germany or providing financial services. But, some companies do not have such authorization.
Investigation against UpbitFx Exchange
Recently, BaFin announced a formal investigation of UpbitFx Exchange ltd. NSFX Limited and UpbitFx Exchange Ltd. have no relationship. Therefore, NSFX Limited has allegedly been the victim of identity theft. On upbitfxexchange.com, the website’s operator goes by the name UpbitFx Exchange Ltd. In certain countries, it goes by the name EM Ltd. The company’s website indicates that it has offices in the United States and Malta.
In February, BaFin issued a warning regarding crypto trading advice on social media. Telegram was mentioned as a source, even though social media channels were not directly mentioned.
BaFin’s principles can be used by any investor who wishes to use social media for investment tips.
The number of followers, likes, or positive feedback is not a reliable indicator, the report said. “They do not reflect the performance of the investment tips. It is very easy to manipulate results on social media. Positive feedback or references related to investment success stories can be fictionized and produced at the author’s request,” BaFin pointed out.
