There's no safety net if your crypto provider goes bust, Germany's financial regulator BaFin has said in a toughened warning issued Monday. jackschickler reports.
In Germany, whether you get your money back from failed crypto projects depends on the details of insolvency law and exact conditions of the service, BaFin said, in an amendment to a February warning on crypto investments.have led to messy bankruptcy cases, where ex-customers must fight for their money back as part of lengthy legal proceedings.
If trading platforms or wallet providers turn south or go bust,"there is no protection covering customer losses, such as deposit guarantee schemes or investor compensation schemes," the statement from BaFin says."Such systems do not exist for crypto assets." In contrast, under European Union law, holdings with conventional banks are usually insured up to the value of 100,000 euros , a move designed to protect consumers and prevent market panic turning into a bank run.
The EU recently struck a political deal on the Markets in Crypto Assets Regulation, MiCA, intended to regulate crypto and protect consumers, but it's not in effect yet. In the meantime, the bloc's financial watchdogs have warned potential buyers to be
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