Supervisory Authority BaFin Warns Against Dubious Providers And Questionable Financial Products

CONTRIBUTOR ARTICLE To print this article, all you need is to be registered or login on Mondaq.com. We are increasingly receiving inquiries from private investors who have made payments via online platforms for the alleged acquisition of crypto currencies or fictitious financial products. Fantasy product names tempt unsuspecting and gullible consumers to supposedly reach for the big money.

Advertised with immense returns, the fantasy products in part however simply do not exist. For the provision of financial services, the creators of such websites claim to have the necessary license in for example Switzerland or Austria or Hong Kong. In Germany, as of January 1st, 2020, a license as a financial services institution in accordance with § 32 KWG is required for anyone who offers the safekeeping, management and security of third-party crypto assets or private cryptographic keys that are suitable for holding, storing, or transferring crypto values.

Dubious providers are aware of this and are trying to cash in quickly in German-speaking countries. It is doubtful whether victims of such suspicious platforms and providers of dubious financial products can enforce lawful repayment claims of their unsuspectingly invested capital against those responsible without legal representation. Anyone who intends to invest in a financial product with an enticing or snappy-sounding name of a seemingly modern "financial service provider" should first obtain information about the company from the competent supervisory authority in the respective country or a lawyer in order not to fall victim to fraudsters.

The supervisory authorities in Europe all have customer hotlines for this purpose. Also, the investor must remember that returns are always correlated to a risk of loss. Under no circumstances should an investor be persuaded by the psychologically trained sales staff, for example, to take out a bank loan to invest in a questionable product.

The German banking supervisory authority BaFin regularly publishes information on dubious financial service providers and questionable financial products on its website: URL unserioese_anbieter_erkennen_node.html The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. AUTHOR(S) POPULAR ARTICLES ON: Finance and Banking from Cyprus New PRIIPs Requirements In 2023 KPMG in Cyprus Many European fund managers have benefited from transition periods since the PRIIPs regulation was first introduced in 2018, but all things come eventually to an end: From 1 January 2023...

ESG – Sustainable Finance Update ELVINGER HOSS PRUSSEN, société anonyme During the last quarter of 2022, several pieces of legislation and other guidance documents related to sustainable finance in the asset management industry have been published by national and European authorities. EMIR 3.0 – The New EU Commission Proposal Arendt & Medernach According to the EU Commission, it has become apparent that the regulatory burden on EU central counterparties (the entities carrying out the clearing of derivatives) is too high... GIR Know How Anti-Money Laundering Maples Group The primary law prohibiting money laundering in the Cayman Islands is the Proceeds of Crime Act (As Revised) (the POCA).

The POCA defines money laundering and establishes offences...