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

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

Digital Assets

Big Time Generates over $100M in Revenue since Preseason

Innovative game developer Big Time Studios announces that its highly anticipated free-to-play multiplayer action/MMO RPG Big Time, has generated $100M in revenue. According to the team, players transacted a total volume of over $230M, without selling a single token.

<