Bitcoin News — Germany

Regulations Roundup: CFTC to Embrace DLT, SIM Swapping Task Force

Posted by Samuel Haig on

In recent regulatory news, the chairman of the United States Commodity Futures Trading Commission has predicted that distributed ledger technology will soon be adopted by the CFTC to monitor the financial markets, and a supervisor of the REACT Task Force has emphasized the priority placed on policing SIM swapping in Northern California. In addition, Germany’s […]

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German Financial Regulator BaFin Shuts Down Activity of British Crypto-Related Firm

Posted by Helen Partz on

Germany’s federal financial regulator BaFin has ordered the cessation of cross-border proprietary trading from a British crypto-related firm.

The German Federal Financial Supervisory Authority (BaFin) has ordered partial cessation of activities by U.K.-based crypto-related firm Finatex Ltd., according to an official announcement published on BaFin’s website on Friday, Nov. 9.

According to the BaFin’s notice, reportedly dated Oct. 2, Finatex Ltd. is ordered to “immediately” stop offering cross-border proprietary trading on its trading platform, Crypto-Capitals. According to BaFin’s announcement friday, the firm must cease trading since its activity is not approved by German financial legislation, including the German Banking Act.

In a short description of the company’s activities, the financial regulator noted that Crypto-Capitals offers “options, contracts for difference (CFDs) on shares, indices, currencies and commodities.” In turn, the company positions itself as a “premium cryptocurrency trading platform operator.” The firm also evidently does not possess an account on any of the social networks listed on its website.

Previously, BaFin has addressed the cryptocurrency industry with public warnings, particularly focusing on Initial Coin Offering (ICO) projects. In late 2017, Germany’s major financial regulator warned investors about the risks of investing in ICO tokens, claiming that ICO investors take all associated risks upon themselves due to the “lack of legal requirements and transparency rules” in the industry.

In February of this year, BaFin clarified obligations for ICO issuers, following “increased queries” about ICO tokens, with operators specifically inquiring “whether the underlying tokens, coins or cryptocurrencies behind so-called ICOs are viewed as financial instruments within the area of securities supervision.”

Most recently, last month BaFin urged the global community to combine efforts in order to regulate the ICO industry, despite uncertainty as to whether ICOs will remain a “niche issue,” or become a “standard part of the financial economy.”

Prior to that, in June 2018, BaFin’s President stated that the main mission of the agency is not protecting individual retail investors, but rather the preservation of general financial stability.

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Survey: Younger Germans More Inclined to Invest in Cryptocurrencies

Posted by Ana Berman on

A recent poll in two German federal states found that 55 percent of respondents are aware of crypto, while 28 percent of younger people find crypto investment “conceivable.”

More than a quarter of younger Germans is ready to buy cryptocurrencies, according to a recent poll by the German Consumer Centers of Hesse and Saxony published Monday, Nov. 5.

Consumer Centers are non-profit, government-backed agencies organized at state level unions. They focus on consumer protection in addition to providing advisory services.

The centers of two German federal states, whose populations total over 10 million people, have conducted a joint survey among internet users. According to the local business media Wirtschaftswoche, the survey polled 1,000 Germans between the ages of 18 and 39.

More than a half of respondents — 55 percent — claim they have heard of cryptocurrencies. 77 percent of those who are aware of digital currencies admit they are not likely to invest in them.

When asked about their perception of the risk factor of cryptocurrencies, 70 percent of participants said they find crypto trading ‘risky’ or ‘very risky’. The release notes that there is a strong correlation between the estimation of risk and the age of respondent. While 54 percent of people aged 30 to 39 consider cryptocurrency investments dangerous, 28 percent of respondents from 18 to 29 found purchasing cryptocurrencies to be “conceivable.”

Notably, the survey itself provides a warning about the risks of investing in digital currencies. Wolf Brandes, the finance markets team leader at the Consumer Center of Hesse writes, "Investors need to know: cryptocurrencies in terms of investment are gray capital markets. There is no regulation or investor protection."

This sceptic stance toward cryptocurrencies is shared within the German government. In September, German Finance Minister Olaf Scholz stated that cryptocurrencies would not be able to replace fiat money, adding that they did not have “an economically significant importance”. He also compared cryptocurrencies to the tulip fever bubble in the Netherlands in the 17th century.

Similar polls have recently been conducted in the U.S. A recent survey by research service YouGov Omnibus has shown that American millennials are most interested in cryptocurrencies, with 36 percent of them saying they would rather use digital currencies than the dollar.  Another poll by U.S. blockchain-analytics firm Clovr found that that cryptocurrency investing is most popular among millennial men earning $75,000–$99,999 annually.

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IOTA Foundation to Integrate Native Token With Ledger’s Hardware Crypto Wallets

Posted by Ana Alexandre on

The IOTA Foundation has announced the integration of its native IOTA tokens with Ledgers’ hardware cryptocurrency wallets.

The Germany-based IOTA Foundation will integrate IOTA tokens with Ledger’s hardware cryptocurrency wallets, according to a press release shared with Cointelegraph Nov. 2.

The IOTA Foundation is a non-profit organization that supports the development and standardization of distributed ledger technology (DLT) and is focused on building ecosystems around IOTA in order to facilitate its commercial adoption.

As of November 2017, the Foundation reportedly owned $255 million in tokens as foundation funds, $22 million as the ecosystem fund, and $20 million as unclaimed IOTA from the crowdsale.

After the integration with the IOTA Trinity and Romeo wallets, the Ledger Nano S hardware wallet will allow users to protect their private keys, giving access to their IOTA tokens in a special chip by isolating users’ keys from their computers or smartphones.

This will enable users to validate transactions on their Ledger hardware wallet as part of the security protocol. The Ledger wallet reportedly deploys a similar chip to that which is used for credit cards or passports.

As Cointelegraph has previously reported, Japanese ICT conglomerate Fujitsu announced the launch of an IOTA-based proof-of-concept (PoC) for audit trail processes in the manufacturing industry.  

The company is reportedly looking to use the IOTA protocol as an “immutable data storage medium” for audit trails across “industrial production environments and supply chains” to improve transparency, data trust, and data security.

In June, IOTA and Volkswagen demonstrated a PoC that uses IOTA’s Tangle system for autonomous cars. The PoC enables Volkswagen to use IOTA’s Tangle architecture to transfer software updates “over-the-air” as part of the car manufacturer’s new “Connected Car” systems.

IOTA Tangle is another type of DLT specifically designed for the Internet of Things (IoT) environment. It is an open-source protocol facilitating Machine-to-Machine interactions, including secure data transfer, real-time micropayments, and other data.

At press time, the IOTA token is trading at $0.47, with a market capitalization of about $1.3 billion according to data from CoinMarketCap.

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German Finance Regulator: International Regulations ‘Desirable’ for ICOs

Posted by William Suberg on

Germany’s BaFin chairman Felix Hufeld is not convinced ICOs will become a mainstream phenomenon.

Germany’s financial regulator wants to see an international effort to regulate Initial Coin Offerings (ICO), despite remaining uncertain whether they would ever become more than a “niche issue,” German business outlet Handelsblatt reported Sunday, Oct. 28.

In an interview with the publication, Felix Hufeld, chairman of Federal Financial Supervisory Authority (BaFin), said German regulatory sources remained hawkish on ICOs as a financial instrument.

“The number (of ICOs) and the volume (of money) per ICO are both getting higher. Investors have mostly minimal rights,” he said, adding:

“I can thus only recommend private investors keep away from such things.”

Regulators worldwide have increased scrutiny on ICO tokens this year as investors in many schemes from 2017 see funds evaporate in the ongoing cryptocurrency bear market.

At the same time, authorities in the U.S. in particular have publicly stated they will closely monitor the sector in order to ensure securities law compliance if such tokens constitute securities.

Germany has traditionally taken a global stance on cryptocurrency from a regulatory perspective, with Hufeld explaining regulatory moves should preempt a more mainstream push in future.

“Up to now we’re still talking about a niche issue,” he said, “whether or not (ICOs) become a standard part of the financial economy remains to be seen.”

He added that international standards were also “desirable” in the longer term, and that discussions to that effect were underway in “multiple international forums.”

In June, BaFin signaled its future regulatory path regarding cryptocurrency would focus not on individual investors’ financial security, but the security of the broader financial markets.

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