- German regulator (BaFin) has opened an investigation into the operations of crypto currency firm Bitcoin Bank Breaker.
- BaFin has warned the public to be cautious of unlicensed firms offering financial services without proper credentials.
- The Regulator has alleged that the firm is offering unlicensed financial services.
The Federal Financial Supervisory Authority of Germany (BaFin) has launched an investigation against the cryptocurrency platform Bitcoin Bank Breaker. The German Regulator suspects that the cryptocurrency firm is operating without the necessary authorization.
The regulator warned German consumers to be careful while dealing with the cryptocurrency platform, claiming that its owners have not disclosed a full company name, legal form, or place of business on their website.
BaFin further showed their concern because the team behind the platform provides investments and financial services without permission. This is because, like most markets in Europe, operating a financial advisory service requires a permission from the regulator.
BaFin’s Warning About Online Companies
BaFin is the financial regulatory authority for Germany. It is an independent federal institution with headquarters in Bonn and Frankfurt and falls under the supervision of the Federal Ministry of Finance. BaFin supervises about 2,700 banks, 800 financial institutions and over 700 insurance undertakings.
The German regulator, just like other global regulators, maintains a database of licensed crypto exchanges, especially the ones which purport to offer financial services or advice to the public
According to the German agency, any entity offering financial or investment services in Germany requires its approval, further urging the public to view the register of approved companies on their database portal.
A search on the regulator’s portal confirms that indeed Bitcoin Bank Breaker is not in the regulator’s database.
The regulator has warned the public to be extremely cautious while investing with internet companies. Investors should perform proper due-diligence before parting with their money.
According to Bitcoin Bank Breaker, their unique selling point is their ability to explain the complex crypto investments information in an easy to understand format that beginners can understand.
“Bitcoin Bank Breaker was created to go back to the basics of trading without sacrificing the features that make your trading as streamlined as possible”, the statement on their website says
But they warn the public on their about page about the risk of full or partial losses that can occur from crypto trading.
However, unlike other regulated financial firms, the cryptocurrency does not give information about the organization’s founding date, profile, portfolio, founders, history, registered address or management. The crypto platform is basic, general and scanty in information, leaving many to wonder whether it was generated by an artificial intelligence.
A search of the cryptocurrency domain name reveals it is registered with namecheap, registered office is listed as Reykjavik (Capital of Iceland). A phone number is provided but company the name is withheld for security purposes.
The location of the company, according to the domain name registrations, may prove difficult for the regulator in terms of jurisdiction. However, the warning from the German regulator is a stark reminder on the need to be extra-vigilant especially on matters to do with financial investments.
BaFin has also had its shares of criticism. An article by Financial Times after the collapse of Wirecard; a blue-chip Dax 30 company, argued that Germany should shutdown the Regulator. This is because it had been ineffective in discharging its duties, had watched helplessly as Wirecard collapsed and had actively frustrated critics’ attempt to expose the fraud.
In addition, some BaFin staff were reportedly trading in companies that they were supposed to supervise leading to conflict of interest. The article further gives BaFin’s troubled history as well as past mistakes which has tarnished its credibility compared to other regulators within the region.
