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Crypto.com is investigated by BaFin and withdraws from Germany

Thursday 30 March 2023 15:18 CET | News

The crypto exchange Crypto.com has announced withdrawing from Germany after regulatory problems, which the BaFin is investigating, according to Finance Forward.

The regulatory issues arose in regard to Crypto.com’s claim that its offer could be used in German and its referral to a German provider as a license partner in its terms and conditions. The website of the German ​​Federal Financial Supervisory Authority (BaFin) also featured this partnership. According to estimates cited in Finance Forward, the Crypto.com app has been downloaded at least 1.3 million times in Germany since it was launched.


Crypto.com did not use a German partner

Users can buy and trade cryptocurrencies via the provider's app, seeing as the company has a license for this in Malta. In order to target customers in Germany with advertising measures, however, a corresponding permit is required in this country, which was not available. Therefore, Crypto.com essentially advertised in Germany without permission seeing as the planned cooperation with Germany-based investment solutions provider CM-Equity never came about, as Finance Forward reported. Crypto.com had planned to transfer its customers to this German partner, however, this never happened.


Crypto.com is investigated by BaFin and withdraws from Germany


Crypto.com stated that it acted as a tied agent for CM-Equity. In the terms and conditions, it informed the users that they were de facto customers of CM-Equity. The Crypto.com brand is primarily used as a middleman, seeing as both the technical infrastructure and identification of customers (KYC) must run through a BaFin-regulated company, which in this case would be CM-Equity.


Crypto.com is no longer available in German

According to information from Finance Forward, the two companies aimed to work together in February 2022. However, now, all reference to CM-Equity has disappeared from the Crypto.com website. The registration of Foris DAX MT Limited, the company behind Crypto.com, as a contractually bound agent with the Bafin also expired in August 2022.


The Crypto.com app is still available to download Germany, but no longer in German. As reported by Finance Forward, the company stated upon request that Crypto.com had a relationship with CM-Equity and that relationship was properly documented at the time. Crypto.com, therefore, stated it had acquired all clients in the European Economic Area, including those residing in Germany, through its licensed and authorised entities.

Source: Link


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Keywords: BaFin, cryptocurrency, partnership, cryptocurrency exchange, EMI licence
Categories: DeFi & Crypto & Web3
Companies: Crypto.com
Countries: Germany
This article is part of category

DeFi & Crypto & Web3

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Crypto.com

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