BaFin’s President backs Global Regulatory System for Cryptocurrencies and ICOs. The president of BaFin, which is Germany’s financial watchdog, is strongly backing a global regulatory structure for initial coin offerings. Condemning of digital currency’s financial rounds, Felix Hufeld encourages private financial specialists to “keep their hands off such things”.
BaFin, An Independent Institution
BaFin’s President backs Global Regulatory System for Cryptocurrencies and ICOs. German’s Federal Financial Supervisory Authority (BaFin), an independent establishment under the wing of the Federal Ministry of Finance, is the financial regulatory authority in the nation. ICOs are probably going to fall under its hands once the framework is built up.
While it remains to be seen whether ICOs will form part of the monetary framework, BaFin’s President, Hufeld, told Handelsblatt that regulators are discussing the approaches to appropriately create the Financial regulation system- he said:
“We do not want to stifle innovation, but must avert dangers at the same time. For example, it is important for us to take action against money laundering and safeguard the privacy rights of investors. In addition, there should be certain minimum standards for the underlying terms of the contract,”
Warning For Private Investors
BaFin’s President backs Global Regulatory System for Cryptocurrencies and ICOs. The office officially issued customer admonitions as the number and volumes per ICO continue increasing tremendously and yet financial investors are not adequately secured. “Therefore, I can only advise private investors to keep their hands off such things”, Hufeld cautioned.
Not absolutely unchecked, digital currency fundraisers which come under current securities law will be regulated by BaFin. Hufeld is against creating restrictive measures quicker than the market creates. “There is infrequently anything great about it”, he added.
Berlin Court’s Decision
The Berlin Court of Appeals has currently administered against the regulator’s view that Bitcoin et al. are units of record and consequently financial instruments, which would come under BaFin’s control.
Hufeld said the court’s order would further squeeze policymakers to set up a framework for digital currencies and fundraisers.
“Such considerations are necessary for the sole reason that it is necessary to make financial regulation future-proof, also with a view to new technological phenomena such as crypto-tokens. As I have said, international standards seem worthwhile for me, so discussions take place in a variety of international forums.”
The irony of the matter is that the controller isn’t bound by the ruling and it is likely that it won’t change its policy until the new enactment is advanced or an administrative court approves the Berlin court’s order.
International law firm Reed Smith LLP exhorts digital currency-related organizations to adopt a mindful strategy, look for lawful counsel, and the authorization of BaFin. Without which, market members may ultimately be requested to promptly stop business activities. Also, pay a fine or serve up to five years in jail.