The Federal Financial Supervisory Authority (BaFin), Germany’s financial industry regulator, announced on Monday that trading platform provider GTS Financial LLC is not authorized to operate in the country.
BaFin explained that GTS Financial contacts German investors and recommends specific shares without being permitted under the German Banking Act to offer banking or financial services to Germans.
The financial markets regulator added that the company is not under its regulatory purview.
“The information provided on the website gtsfinancial.net and the information and documents available to BaFin give reasonable grounds to suspect that the platform is being used to conduct banking business and/or provide financial services in Germany without the required authorisation,” BaFin said.
In addition, the regulator noted that claims by GTS Financial that it is supervised by the US Securities and Exchange Commission cannot be verified.
"The company mentions two business addresses in the USA on its website. Moreover, the website refers to additional alleged business addresses in Denmark and Belgium," BaFin said.
The German regulator advised the public to check if a financial services firm has been authorized through its database of companies.
“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 to avoid becoming the victim of fraud,” BaFin said.
LiquiTrade
BaFin’s latest regulatory flagging of GTS Financial follows its investigation on LiquiTrade Limited, Cayman Islands, last month.
The market supervisor noted that the company is not authorized under the German Banking Act and is neither under its supervision.
“Based on the content of its website latoken.com, facts justify the assumption that LiquiTrade Limited operates illegal banking and financial services in the Federal Republic of Germany,” the watchdog explained.
Meanwhile, BaFin recently clarified that deposit insurance protection in the country’s mainstream financial industry does not cover losses related to cryptocurrencies.
“BaFin now points out that crypto-assets do not fall under the protection of deposit insurance and, as a rule, the protection of investor compensation does not apply either,” the supervisory authority noted.
