German watchdog investigates GTS Financial over regulation claims

abdelaziz Fathi

Germany’s top financial regulator today warned of the dangers posed by offshore brokers that continue to chase online trading  business, including within the gray area of the country’s CFDs sector.

BaFin has specifically marked another firm with the red flag. The independent regulator highlighted that a company called GTS Financial is running an illegal business while having not acquired proper authorization. The firm under BaFin’s firm offers German customers CFDs that allegedly give them exposure to FX and cryptocurrency instruments.

According to the BaFin’s intel, the regulator suspects GTS Financial to be a suspicious company as it claims registration by the US Securities and Exchange Commission in an effort to deceive the public. It also refers to additional alleged business addresses the US, Denmark and Belgium.

This gives the impression that it is legitimized in the Germany, which has never been true. Either way, the financial regulator further urged its citizens to be careful and follow due verification processes, check the company’s identity (identity details, country of establishment, etc.), and never to trust a company if it cannot be clearly identified.

The company goes even far with its pledges on its website, stating that it offers powerful strategies that make trading with them outstandingly risk-free.

BaFin turns eye to social media

“GTS Financial LLC contacts German investors and recommends specific shares. The company also operates a trading platform with the following domain: gtsfinancial.net. In accordance with section 37 (4) of the German Banking Act (Kreditwesengesetz – KWG), BaFin would like to make clear that GTS Financial LLC, USA, has not been granted authorisation under the KWG to conduct banking business or provide financial services. The company is not supervised by BaFin,” the statement reads.

To prevent such practices, BaFin issued several guidelines that encourage potential investors to be wary of promises of disproportionate returns. A guaranteed investment with a high return that considerably exceeds the market return is often too good to be true, it says.

In an attempt to keep up with the rise of the crypto market, including the number of trading platforms and users, BaFin has been adamant in its warnings toward investors, elaborating on the potential risks associated with the booming industry.

The financial regulator has also delivered a stern warning against unchecked traders that are using flashy social media profiles to trick inexperienced persons into thinking they can trade online and make thousands in no time.

These warnings were in response to a rise in unregulated trading signals on online forums, and a concern that retail investors are not aware of the risks associated with following such tips, BaFin said.

While these bogus profiles advertise get-rich-quick schemes, they do not even have a website and operate solely on social media channels, including Instagram, Facebook, or WhatsApp.

Read this next

Retail FX

Scope Markets launches unleveraged trading

“Whilst our traditional contract for difference (CFD) products continue to prove incredibly popular, the Invest account is unleveraged and only allows ‘long’ positions to be taken, a combination that significantly reduces the risk of capital losses.”

blockdag

Unlocking Profit Potential: Earn Returns with DecodeEX Experience Bonus!

DecodeEX, the innovative brokerage subsidiary of Decode Global, announced its experience bonus campaign, offering every user the opportunity to maximize their strategic trading potential with up to $10,000 in experience bonus. 

Market News

Pretiorates’ Thoughts 28 – Precious metals and base metals out of control

Ten days ago we mentioned in Pretiorates’ Thoughts 26: Chapter 2 should start with Precious Metals.

Retail FX

Webull launches discount brokerage in Malaysia

“Making investing more inclusive and accessible to all, Webull Malaysia brings best-in-class tools and information to empower investors of all levels with knowledge and skills to help them make better investment decisions and achieve their investment goals.”

Digital Assets

Hidden Road adds OKX’s Nitro Spreads into prime brokerage

“Hidden Road continually seeks to increase market access and capital efficiency through expanded prime brokerage offerings. Integrating OKX’s Nitro Spreads product builds upon this philosophy by extending our counterparties’ ability to execute risk-managed arbitrage strategies.”

blockdag

Dev Release 31: BlockDAG’s SHA-3 Upgrades Propel Crypto Mining Innovation as Miner Sales Approach 5800 Units

Learn about BlockDAG’s 31st Development Release, which includes advanced SHA-3 updates and a significant increase in miner sales, driving advancements.

blockdag

BlockDAG Dominates 2024 Crypto Trends: Surpasses $28M in Presales Amid Strategic Partnerships

Explore BlockDAG, Shiba Inu, and Kaspa Killer’s rise in 2024’s crypto market, focusing on BlockDAG’s $28M presales, strategic partnerships, and innovative technology.

blockdag

BlockDAG’s $30 by 2030 Valuation Prediction and Roadmap Reveal Gains Traction From Filecoin and XLM Investors

Discover why BDAG’s $30 price prediction by 2030 outshines Filecoin Investors’ hopes and XLM’s recent surge with a booming presale and clear roadmap.

blockdag

BlockDAG Captures $28 Million in Presale, Drawing Investors Away from Ethereum and Bitcoin

Explore how BlockDAG’s revamped dashboard led to a $28 million presale boost, while Ethereum sees a downturn and Bitcoin struggles with hash rate reductions.

<