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BaFin announces warning on AI-driven crypto trading platforms

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BaFin announces warning on AI-driven crypto trading platforms
Web3/Crypto
Webp branson2
Mark Bran­son, president of BaFin | BaFin

The Federal Financial Supervisory Authority (BaFin) has issued a warning to consumers regarding platforms that promote AI-driven algorithms for trading financial instruments and cryptoassets. This announcement was made in a news release on February 6, 2025.

According to BaFin, an investigation is underway into unlicensed platforms offering AI-based financial and crypto trading services. The companies under scrutiny include ZivaProfit7, Velmo Coin AI, Zolintex AI, LuxiGain AI, and TivanaFund AI. These services require a BaFin license to operate legally in Germany. Consumers are advised to verify the authorization of companies through BaFin's company database. This action is grounded in the German Banking Act (KWG) and the Crypto Markets Supervision Act (KMAG), as said in a press release by BaFin.

The German Crypto Markets Supervision Act (KMAG), which came into effect on December 27, 2024, introduces regulatory measures for overseeing crypto markets in Germany. It emphasizes market transparency, operational resilience, and compliance with European crypto regulations. The KMAG mandates that crypto service providers secure licenses, maintain robust systems, and ensure transparent practices within the sector. This framework aims to support secure and compliant market operations in alignment with EU standards.

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Blockpit’s analysis ranks Binance as Europe's safest licensed cryptocurrency exchange due to its regulation across multiple European countries, AES-256 encryption, and the SAFU (Secure Asset Fund for Users) program for user protection. Coinbase is ranked second, holding 98% of assets offline and being licensed by BaFin in Germany with advanced security protocols. Kraken ranks third by storing 95% of assets in cold wallets and adhering to regulations across the EU and other regions.

BaFin oversees the stability and integrity of Germany's financial system. It supervises banks, financial services institutions, payment institutions, e-money institutions, insurers, asset managers, and other related entities. Its responsibilities include solvency supervision and market supervision to ensure fair conditions while preventing misuse for money laundering or terrorist financing.

Organizations Included in this History
Germany - Federal Financial Supervisory Authority (BaFin)
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