Using WhatsApp groups and chats, the operators pass on recommendations for the purchase of financial instruments and cryptocurrencies.

The following is an example of how they initiate business as observed in comparable cases:

• Advertisements are placed on social media offering free stock recommendations or lessons on how to trade shares, for example. These advertisements feature well-known business experts and licensed institutions. Interested investors are encouraged to contact the creators of the advertisements on the messaging service WhatsApp and join a WhatsApp group.
• In these WhatsApp groups, a supposed business expert shares their knowledge on financial topics. They are accompanied by an assistant who moderates the chat and serves as the contact person for group members. In seminars or lessons, the expert talks about supposedly lucrative investment models and recommends that members purchase certain shares.
• The group initiators seek to build trust over several weeks. Eventually, they usually present an innovative financial investment system that can supposedly generate considerable profits. Sometimes the initiators advertise their own crypto token, which members can buy before it goes on sale to the public.
• Marketing campaigns encourage group members to take part in daily check-in promotions and prize draws, for example to win crypto or tangible assets.
• Interested investors are directed to register with an external online trading platform, an in-house trading program or an app in order to trade in various financial products recommended by the initiator of the WhatsApp group. The operators usually claim that only a limited number of users will be able to access these trading platforms.
• In some cases, users are encouraged to try out the online trading platform or app on a trial basis. The group initiators sometimes provide financial resources for this trial period. To build trust, they initially make it possible for users to withdraw small amounts.
• Deposits are usually made through a foreign account or payments in the form of cryptoassets.
• As time goes on, the pressure on investors to make additional deposits increases. Payouts are subject to conditions or are no longer possible at all.
• The availability of the websites hosting the trading platforms changes frequently.

BaFin is issuing this information on the basis of section 37 (4) of the German Banking Act (Kreditwesengesetz – KWG) and section 10 (7) of the German Cryptomarkets Supervision Act (Kryptomärkteaufsichtsgesetz).