Federal Financial Supervisory Authority BaFin has ordered crypto exchange GmbH to stop operating as a financial brokerage. This is because it does not have regulatory authority to run a financial commission business.
The firm has been selling Bitcoins to customers and then transferring the gains to their accounts in Euros within 30 minutes. However, some customers said they had not received their payments even after transferring Bitcoins to the firm. The company was also not auditing by BaFin as claimed.
The regulator issued cease orders against three companies last year. This was due to their connection to OneCoin, which was also targeted by regulators in India and other countries for Ponzi activities. Mumbai police arrested 23 people in OneCoin and claimed its dealings and promoters amassed close to Rs. 75 crore.
BaFin also warned people last year about the risks involved with initial coin offerings. They said these were highly speculative and risky.