Crypto.com has been unavailable in Germany for some time. The Singapore-based crypto exchange has announced that it will withdraw from the Federal Republic due to investigations by the German regulator BaFin.
Crypto.com needed a partner company with an appropriate license to advertise and operate in Germany. In 2021, Crypto.com signed an agreement with CM-Equity, a German platform that describes itself as an approved trading partner for professional securities clients. The agreement aimed to allow both companies to operate in Germany without acquiring licenses for an extended period.
Subsequently, Crypto.com notified CM-Equity to BaFin as a business partner and mentioned the company in its terms of use. Crypto.com stated it was an “affiliated representative of CM Equity AG.” However, the latter later stated that Crypto.com had taken over all tasks personally and that the German platform was not involved in the business practice. Crypto.com launched an aggressive advertising campaign, including social media. This resulted in a sharp increase in downloads of the crypto app.
Crypto.com has a Malta license, allowing German customers to install the application. However, a separate license would have been required to target potential customers in Germany with advertising measures, which was not available. The Crypto.com app is, therefore now, initially no longer available in German in Germany but remains accessible in the country.
When asked, the company confirmed that it had indeed established a relationship with CM-Equity, which was duly documented at the time. However, the company also clarified that all of its customers in the European Economic Area (EEA) had been acquired through its licensed and authorized companies without specific advertising in Germany. Crypto.com has massively advertised its application on social networks. The question now arises is what happens to the customers acquired through these advertising campaigns.
Last year, the German financial regulator indicated that it was looking into the matter. Since then, however, it has confirmed that it is only conducting an investigation, which makes a considerable difference.