The Federal Financial Supervisory Authority (BaFin), Germany’s financial industry regulator, announced on Friday that the online broker MainTrade.co is not authorized to operate in the country. The brokerage firm is also not under BaFin's supervision, the regulator said.
The new update comes a few days after the regulator urged consumers in the country to beware of the trojan virus ‘Godfather’ which attacks Android-based banking and cryptocurrency apps.
“In accordance with section 37 (4) of the German Banking Act (Kreditwesengesetz – KWG), BaFin would like to make clear that MainTrade does not have authorisation under the KWG to conduct banking business or provide financial services,” the financial markets supervisor said in an update published on its website.
Furthermore, the German regulator noted that the information available on MainTrade’s website, maintrade.co, “gives reasonable grounds” to suspect that the online broker is offering financial services in the country without the required permission.
Watch this FMLS22 session that explores all angles of expected forex regulation in 2023.
“Companies that conduct banking business or provide financial services in Germany require authorisation under the KWG. However, some companies operate without the necessary authorization,” BaFin explained.
Therefore, the regulator urged retail investors to “exercise the utmost caution and do the necessary research beforehand in order to identify fraud attempts at an early stage.”
Major BaFin Investigations in 2022
Last year, BaFin raised alarm on a number of online forex and crypto trading platforms allegedly operating in the country without due authorization.
In November, the regulator ordered Coinbase’s local office in the country to improve its “organization deficiencies." The financial markets supervisor identified the shortcoming in the annual audit of the company’s finances.
Earlier in September, the regulator flagged down GTS Financial LLC, a trading platform provider, for not obtaining permission to run its business in the country. BaFin explained that the firm contacts German investors and recommends specific shares without being permitted under the KWG to offer banking or financial services to Germans.
Moreover, during the course of the year, BaFin issued similar warnings against LiquiTrade, blockchains.de and UpbitFX Exchange. In the case of UpbitFX Exchange, the financial markets watchdog alleged that the firm claimed a false connection to a BaFin-registered firm, NSFX Limited (nsbroker.com).
