Germany: BaFin Accuses Crypto Exchange Coinbene of Unregistered Trading


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The Federal Financial Supervisory Authority of Germany, commonly referred to as BaFin, on May 28, 2019, issued a warning against cryptocurrency exchange Coinbene stating that it was operating without a license.

German Regulator Lashes out at Coinbene

Currently ranked as the ninth largest cryptocurrency exchange platform by reported trading volume, Coinbene is under the scrutiny of the German financial regulator.

According to an official announcement, BaFin has accused Coinbene of conducting business without complying with Germany’s regulatory laws. Further, the financial watchdog also accused Coinbene of hiring unregistered freelance cryptocurrency traders to execute trades on its behalf. In return, the exchange pays these traders a fixed commission, BaFin alleged.

The watchdog states:

The freelancer should provide his or her own bank account and perform trades prescribed by the company through cryptocurrency trading platforms. Cryptocurrencies are usually financial instruments. Trading in financial instruments on behalf of customers is subject to authorization under the KWG.

The official announcement notes that “Coinbene LTD Germany” is not registered in Germany’s commercial register. Interestingly, it didn’t take too long for Coinbene to respond to BaFin’s allegations.

The Japan-based exchange took to Twitter to respond to inquiries from its users. Concerning allegations about hiring freelance traders, Coinbene cleared that it is “not planning to open any office nor hiring any representative in Germany.”

With Coinbene declaring that it has no official presence in Germany, things have become more puzzling regarding the identity of actual operators of Coinbene LTD Germany. The company’s absence from the country’s business register has made it all the more difficult to determine the people behind the entity.

Unregulated Businesses Creating Havoc 

The novelty of the crypto industry and its general lack of awareness among the masses is something conmen have been fully exploiting to their advantage.

As previously reported by BTCManager on October 29, 2018, Thailand’s Securities and Exchange Commission (SEC) had warned the public from investing in nine unregistered initial coin offerings (ICOs.)

Moreover, concerns surrounding fake trading volume reported by cryptocurrency exchanges have also put regulators in a permanent mode of vigilance. BTCManager reported on January 21, 2019, that two former executives of South Korean exchange Komid had been arrested for faking cryptocurrency transaction volumes.

In March 2019, a report published by Bitwise Asset Management posited that almost 95 percent of bitcoin trading in cryptocurrency exchanges is manipulated.

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