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August 9, 2022
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BaFin: watch out for cryptocurrencies! –

The German Federal Financial Supervisory Authority (BaFin) has warned investors about the risks associated with investing in cryptocurrencies. This is not the first such warning from a financial regulator.

BaFin warns against cryptocurrencies

IN warning on consumer protection published on Friday on the authority’s website, the regulator entered about investing in cryptocurrencies.

In its communication, BaFin somewhat repeated similar warnings already expressed by several European regulators, including the European Securities and Markets Authority and the European Banking Authority.

According to BaFin, retail investors who buy cryptocurrencies must be aware of the risk of incurring as much as 100%. precipitate.

Cryptocurrencies in Germany

It is worth recalling that companies from the digital currency market – exchanges, exchange offices and such platforms – can only operate in Germany under a license granted by BaFin. The country also legalized digital securities, which took place in December 2020.

It is not the end. In Germany, banks – like their American counterparts – can offer clients cryptocurrency storage solutions after obtaining special consent.

In turn, in December 2020, the German bank Hauck & Aufhauser announced plans to create a cryptocurrency fund.

Cryptocurrency investment warnings are a popular phenomenon in the financial regulatory community around the world, especially in the context of the current bull market. Only in 2021, regulatory authorities from South Africa, Great Britain, and even Thailand, issued similar messages. In February, the finance minister of the latter country criticized the current increase in the scale of speculation in the cryptocurrency market. By the way, he warned against the potential huge losses that retail investors may incur.

Meanwhile, the European Commission’s legislative proposal on cryptocurrency asset markets continues to raise some concerns among industry stakeholders. They are concerned that the new regulations will affect the development of innovation.

It is worth recalling that later this month, the International Association of Trusted Blockchain Applications published its detailed report based on surveys and contacts with investors from the cryptocurrency industry. The document indicated that some of the potential regulations that the EU is working on would be hostile to the development of startups.

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