Germany’s BaFin says UpbitFx Exchange unlawfully targets Germans

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 UpbitFx Exchange 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 UpbitFx to be a suspicious company as they use the details of a Malta-licensed company called NSFX Limited (also operating under the brand ‘NSBroker’) in an effort to deceive the public. This gives the impression that it is legitimized in the Germany, which has never been true.

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.

According to the watchdog, UpbitFx claims to be located in in the United States and Malta, which seems untrue. 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.

BaFin turns eye to social media

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.

These traders, however, do not have the necessary accreditation or qualifications to offer these services, though they promise very lucrative and guaranteed returns. Tips garnered online by young investors via social media may be inaccurate, the watchdog warns, while advice from financial celebrities can come with a good deal of risk when deciding where to park their money.

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