Germany’s federal financial supervisory authority (BaFin) today warned investors of the activities of OMC Markets, an offshore FX broker that has been offering financial products in the country without authorization.
Echoing previous warnings, the independent financial regulator noted that OMC Markets offers German customers CFDs that allegedly give them exposure to currency and other asset classes.
BaFin has also published a statement warning of the activities of the crypto website VIVA EXCHANGE OÜ, which was flagged for allegedly offering cryptocurrency-focused trading products without complying with its financial legislation.
In a short description of the company’s activities, the financial regulator noted that the company is based out of Tallinn, Estonia, while soliciting its clients using the website exw-wallet.com.
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BaFin puts crypto under spotlight
Crypto firms operating in Germany have to apply for a license to the nation’s financial watchdog BaFin since the end of 2019 when the new Anti-Money Laundering (AML) regulations came into effect. Although derivatives referencing cryptoassets would not fall under this suggestion, they remain subject to ESMA’s current restriction and any future proposals by the BaFin regarding the sale of these instruments to retail investors.
To prevent such practices, BaFin issued several guidelines that encourage investors to be wary of promises of disproportionate returns. BaFin has also advised the public always to verify the company’s identity (identity details, country of establishment, etc.) and never to trust a company if it cannot be clearly identified.
In its capacity to supervise the financial market and enforcing compliance with rules and regulations, BaFin issued a series of advisories in recent years, most recently when it announced specific details about its retail forex and CFDs trading stance. The watchdog was focusing on brokers that do not provide negative balance protection, exposing clients to unlimited losses.
In addition, BaFin has been wary of the booming cryptocurrency industry. The German watchdog has been adamant in its warnings toward investors, elaborating on the potential risks associated with investing in Bitcoin and other cryptocurrencies.