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German Financial Regulator Halts Operations of British Crypto-Related Firm

An official announcement published on BaFin’s website reveals that the German Federal Financial Supervisory Authority has ordered the partial cessation of the operations carried out by Finatex Ltd., a British crypto-related firm.
An Initial Coin Offering (ICO) is a means through which cryptocurrency businesses acquire funds from individual investors before finally going public or improving a product. This is roughly equivalent to an IPO in the conventional investment world. While this means has been successful both for crypto businesses and investors, some have been started up as fraudulent means of obtaining investment under the pretense of future development thereby carting away with investors’ money.
A lot of measures have been put in place to license ICOs so as to cut down on the number of fraudulent ICOs ridding the industry, but some false ones still operate successfully. ICOs are not the only fraudulent cryptocurrency ventures on the sector now as firms are joining the act of running peer to peer donation schemes, pyramid donation schemes and a lot of other fraudulent ventures.

Finatex Ltd. Allegedly Operating Illegally in Germany.

Dated October 2nd, the notice announced by BaFin stated that Finatex Ltd. was ordered to with immediate effect to cease offering cross-border intellectual trading undergone on Crypto-Capitals, its trading platform. Stating in the announcement on Friday, Crypto-Capitals must suspend its activities since they are not approved by the German Banking Act including German financial legislation.

Describing the company’s activities in brief, the financial regulator pointed out that Crypto-Capitals offers indices, options, contracts for difference (CFDs), commodities and currencies”. The description also stated that the company presents itself as a premium cryptocurrency trading platform which does not possess any social media account on any of the networks needed on its official website.
Prior to this time, BaFin had discussed the advantages of blockchain technology, the financial agency also notified the cryptocurrency industry with public cautions, stressing particularly on Initial Coin Offering (ICO) projects . During the latter end of 2017, investors were warned by Germany’s major financial regulators about the dangers of investing in ICO tokens stating that all risks associated with their investment were upon themselves due to the absence of legal requirements and clarity rules in the industry.

Is ICO Staying in Germany?

Despite the uncertainty as to whether the issue of ICOs will become a standard branch of their financial economy or remain a niche issue, BaFin encouraged the global body last month to combine resources and efforts in order to regulate the ICO industry.
Before that, in June 2018, the President of BaFin mentioned that the core mission of the agency is to preserve the general financial stability rather than protect the individual retail investors.

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