German Authority, BaFin shuts down activities of UK firm, Finatex Ltd.

According to the announcement posted on BaFin’s website on Nov. 9, The German Federal Financial Supervisory Authority (BaFin) has ordered a temporary suspension of activities by Finatex Ltd.

The reasons stated by BaFin is that the activity is not approved by German financial legislation, including the German Banking Act. Reports from Oct. 2 show that Finatex Ltd. was ordered to immediately stop offering cross-border proprietary trading on its platform, Crypto-Capitals.

BaFin noted that Crypto-Capitals offers “options, contracts for difference (CFDs) on shares, indices, currencies and commodities”. The company positions itself as a “premium cryptocurrency trading platform operator”. The UK-based crypto-related firm doesn’t hold any social media handles that are shown on their website.

In 2017, BaFin had warned investors about the risks of putting one’s money in ICO tokens. They claimed that ICO investors take all the related risks upon themselves since there is a “lack of legal requirements and transparency rules” in the crypto industry.

In Feb. 2018, BaFin defined a set of obligations for ICO issuers due to the increase in the number of queries about ICO tokens. Operators specifically inquired “whether the underlying tokens, coins or cryptocurrencies behind so-called ICOs are viewed as financial instruments within the area of securities supervision.”

The German financial regulatory have recently urged the global community to combine efforts to regulate the ICO industry, despite the question as to whether ICOs will continue to remain a “niche issue” or become a “standard part of the financial economy.”

In June 2018, BaFin’s president stated that the role of the agency is to preserve the general financial stability and not to protect individual retail investors.

The statements by the BaFin are reasonable considering the minimum amount of security involved in ICOs, but isn’t this a hindrance to the crypto growth? Asking the global community to grow by shutting down other crypto agencies does seem a bit daunting.

Want to share your thoughts on this?