BaFin Cautions Investors Against Dealing With Bulgarian Crypto Broker 5 Capital
BaFin (Federal Financial Supervisory Authority), German regulator, has cautioned investors not to deal with 5 Capital, Bulgarian cryptocurrency broker.
The regulator has prohibited 5 Capital from functioning in the country as the enterprise has unlawfully issued Contracts for Difference (CFDs) structured to reveal customers to the crypto price volatility.
The regulator discovered that the enterprise offered the service without appropriate license. The Sofia (Bulgaria) based broker directs its users to access a website run by its parent firm 21TEX.
BaFin has cautioned investors to verify a company offering services they utilize and restrain from believing enterprises which cannot be put under background check.
In Germany, new Anti-Money Laundering (AML) regulations will take effect in 2020. While derivatives offered by the enterprise will not be subject to the aforementioned rule, nevertheless, they are overseen by the European Securities and Markets Authority as assets offered to small scale investors.
Notably, last week, BaFin issued an order to Karatbit Foundation to terminate unauthorized operations with immediate effect in Germany.