The German federal financial supervisory authority (BaFin) has issued a warning to investors over the activity of Bulgarian crypto broker 5 Capital.

According to a report by Finance Magnates, the German watchdog said that 5 Capital offers European investors contract for difference (CFD) products that allegedly include exposure to crypto-assets.

Crypto businesses and exchanges in are required to apply for a license to BaFin by the end of 2019 as apart of compliance with new anti-money laundering regulations being adopted by the country. While derivatives that reference crypto-assets are not included in the same regulatory category, they are restricted by the European Securities and Market Authorities (EMSA) in regards to retail investors.

According to the report, BaFin has been increasingly wary of the cryptocurrency industry, issuing regular warnings to investors about the potential risks associated with bitcoin. While 5 Capital is based out of Sofia, , the company will have to apply for a license and be in full compliance with BaFin by the end of the year in order to continue operating in .

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Source: https://www.cryptoglobe.com/latest/2019/11/german-watchdog-issues-warning-over-bulgarian-crypto-broker/