Similar to other European countries, Germany has no active cryptocurrency regulation. That does not mean companies can offer services related to Bitcoin without being regulatory compliant. For Crypto-Capitals, things have gone from bad to worse. The German firm has been ordered to shut down operations by BaFin over regulatory concerns.
As part of its service, Crypto-Capitals provides cryptocurrency-oriented trading products. That includes CFDs, a strictly regulated investment vehicle in Germany. However, the crypto firm is not following existing guidelines associated with offering such services. BaFin has now ordered the firm to cease operations until this matter can be resolved.
This explosion of crypto activity has caught the attention of Germany's financial watchdog. BaFin has advised consumers on crypto investments over the past few years. They are also in the process of cracking down hard on any company not following the rules. While Crypto-Capitals is not offering an illegal service, their regulatory compliance leaves much to be desired.
This is another clear warning signs for all cryptocurrency companies. Offering products catering to traditional investors should not be taken lightly. If firms do not comply with local regulations, they will be shut down sooner or later. Crypto-Capitals is just one example of how quickly things can deteriorate for firms skirting the law.
Germany does not have the most open-minded approach to Bitcoin. It is one of the few countries around the world where LocalBitcoins is not available. The platform was forced to cease operations several years ago due to regulatory pressure. Despite the setback, other trading platforms still exist in the country to this very day.
Warnings issued by BaFin are a positive sign for the industry. If cryptocurrency is set to go mainstream, compliance needs to be the number one priority at all times. There is no reason for service providers to take shortcuts. Avoiding unnecessary scrutiny is always the favorable option. Germany is actively monitoring the cryptocurrency industry for flaws. They also want to have the G20 regulate this industry over the coming years.How important is a clear regulatory framework (and the enforcing of that framework) to the long-term success of cryptocurrencies? Let us know in the comments below. Images courtesy of Shutterstock
11/12/2018 / 05:30:51 Source: livebitcoinnews