Germany’s Federal Financial Supervisory Authority, better known as BaFin, have stepped in to shut down Crypto.exchange.
Crypto.exchange had advertised online as a way for investors to exchange their Bitcoin into euros. Investors were to transfer Bitcoin to Crypto.exchange, who would sell then on an exchange and send the investor the euro payment. The service was promised to take no longer than half an hour.
Whether or not they managed to deliver this service is unclear. However, what is certain is that they claimed to be regulated by BaFin, which was untrue. BaFin have issued a statement detailing that in fact Crypto.exchange was unregulated, and did not have any of the necessary authorisation.
As of time of writing the company’s website is down, the phone number is not working and they are uncontactable by email.
The German Approach to Cryptocurrencies
Though not actively hostile to cryptocurrencies, the German response has certainly been cautious so far. Earlier this month Bundesbank board member Joachim Wuermeling warned that regulating on a country-by-country basis would be ineffective.
Speaking in Frankfurt he said that, “effective regulation of virtual currencies would therefore only be achievable through the greatest possible international cooperation”.
With this in mind, Germany has teamed up with France to issue a joint proposal at March’s G20 summit in Argentina. On cryptocurrencies, Peter Altmaier, German Chief of Staff of the German Chancellery, said that “We have a responsibility towards our citizens to explain and reduce the risks”.
However, the German population is much more keen on crypto than its regulators. Berlin was described by the Guardian as the “Bitcoin Capital of Europe” in 2013. Prestigious business school ESMT (European School of Management and Technology) even accepts cryptocurrency payments for tuition costs. Georg Garlichs, their CFO, said that particularly for “international transactions from countries without a well-functioning banking system” Bitcoin and other virtual currencies “offers great advantages”.
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