German financial regulator BaFin today issued new guidelines encouraging potential investors to beware of unauthorized broker 10Cryptomarket. It has previously issued guidance and asked investors to steer clear of any company promising disproportionate returns to the investors.
German top regulator warns investors
The German regulator has warned investors of the dangers posed by offshore brokers who are working to obtain a share of the online trading business. They are also eyeing the unregulated crypto sector in the country. BaFin marked 10Cryptomarket with a red flag recently and noted that the company is running an illegal business in the country without receiving proper authorization. The firm was offering CFDs to users and providing users with exposure to forex and cryptocurrency-related instruments.
BaFin said, “The operator of the platform is thus conducting proprietary trading dealing on own account within the meaning of section 1 (1a) sentence 2 no. 4 (c) of the KWG on a commercial basis. Neither the trading platform nor its operator hold the authorization required under section 32 (1) of the KWG and are therefore conducting unauthorized business.”
Using fraudulent logo
According to the regulator, 10Cryptomarket was using contract documents marked with the BaFin logo to prove its legitimacy to the users. However, they were never authorized by the regulator. It made tall claims on its website, telling users that they have powerful strategies that will provide risk-free trading.
The company further claimed to be located in Germany with offices in London, Moscow, Singapore, and Zurich. BaFin once again urged investors to be careful of the entities they engage with online and ensure that the company has a trusted identity. A guaranteed high return that exceeds the typical market return could be a sign of fraud. The regulator has issued several such warnings in the past, highlighting the risks of working with unauthorized online trading platforms. Even crypto firms in the country have to get a license from the regulator to ensure compliance with its anti-money laundering (AML) regulations.