Topic Measures Cryp Trade Capital Ltd.: BaFin prohibits unauthorised banking business and orders winding-up

Date: 03.08.2017

As of 4 April 2017, the Bundesanstalt für Finanzdienstleistungsaufsicht - BaFin (Federal Financial Supervisory Authority) issued a cease and desist order against Cryp Trade Capital Ltd., Alicante, Spain, which was engaged in unauthorized banking business, to immediately stop those banking activities in Germany, and ordered the immediate winding-up of said business.

Cryp Trade Capital Ltd. operates the trading platform, where bitcoins and other instruments are traded which quantify as Rechnungseinheiten (units of account) within the meaning of § 1 (11) sentence 1 no. 7 of the Kreditwesengesetz (Banking Act; hereinafter being referred as such as “KWG”) and also as financial instruments within the meaning of the KWG. The platform is also directed at customers in Germany. Since the operator of the platform purchases and sells the units of account in its own name but for the account of customers, the service qualifies as Finanzkommisionsgeschäft (financial commission business) which is considered as banking business and thereby as banking business pursuant to § 1 (1) sentence 2 no. 4 of the KWG. In Germany, this kind of service is subject to an authorisation requirement pursuant to § 32 (1) of the KWG. Cryp Trade Capital Ltd., as the operator of the platform, does not have the required authorisation.

The BaFin orders are immediately enforceable by law.

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