BaFin orders three firms to stop trading and warns against unlicensed trading platforms

The German Federal Financial Supervisory Authority has warned against entering into transactions, particularly involving contracts for difference, binary options and so-called forex-trading, via online trading platforms operated by unlicensed providers

What has happened?

The German financial regulator has warned against entering into transactions, particularly involving contracts for difference (CFDs), binary options and so-called forex-trading, via online trading platforms operated by unlicensed providers.

What does this mean?

The Federal Financial Supervisory Authority (BaFin) issued a warning to the German public, after ordering three companies to cease their operations, as they were trading without the required authorisation.

The first two companies, Gum Ltd, operating as Stern Markets and online via www.sternmarkets.com, and Pairs Ltd (www.weissfinance.com), are both based in the Marshall Islands, and the third company is BP1 LP (www.sternoptions.com) is based in the UK.

BaFin said that all three companies have been offering binary options or CFDs on shares, indices, currencies, commodities and cryptocurrencies without proper authorisation.

"If a website is in German, offers customer support in German and German telephone numbers are provided, this does not necessarily mean the company is domiciled in Germany," the regulator said.

The regulator explained that it is often hard to find the names of the platforms' operators on their websites and that the addresses given as the company headquarters are often offshore letterbox addresses.

Further, the operating companies and their alleged company headquarters change frequently.

The operating companies usually do not hold authorisation to target the German market or to conduct business in Germany.

"There is a high risk that it will not be possible to enforce the repayment of funds paid into these online accounts or the payment of any profit generated", BaFin warned.

Next steps

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Contacts
Yvonne Draheim
Partner
Hamburg
Sabrina Mittelstaedt
Associate
Hamburg
Languages English
Topics Blockchain
Countries Germany

 

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