The financial supervisory authority is currently checking whether the crypto platform Cake Defi is conducting unauthorized business in Germany.
(Photo: Reuters)
Dusseldorf The German financial regulator Bafin is investigating the Cake Defi crypto project. “The content on the Cake Pte. Ltd. operated website cakedefi.com justify the assumption that the company illegally conducts banking or financial services in Germany, “said the authority in a press release on Friday.
At the same time, the Bafin made it clear that the Singapore-based project Cake did not have a license required by the Banking Act to conduct banking business or provide financial services.
Behind the Cake Defi platform, founded in June 2019, is the well-known Austrian entrepreneur and blockchain expert Julian Hosp. His crypto company is a fast-growing fintech project. It provides access to a wide range of decentralized financial services, defi for short, and enables customers to generate returns on their crypto and digital assets.
Cake Defi reacted quickly to the Bafin publication via the social media channel Twitter: “Today we were made aware of a report on the website of the German supervisory authority Bafin,” said the platform. “We want to emphasize that we are a Singapore-based company and want to reassure our customers that we are complying with local laws and regulations,” added Cake Defi.
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When a user asked what this meant for German customers, Cake Defi was relaxed: “No need to worry,” was the short message on Twitter. In its press release, the Bafin advised consumers to exercise caution when investing in the Internet and to conduct thorough research “in order to identify attempted fraud in good time.”
The Austrian entrepreneur and blockchain expert founded the Cake Defi platform in June 2019.
(Photo: Xing / Julian Hosp)
Germany is an important market for Cake Defi. CEO and co-founder Hosp even described him in an interview last summer as “one of our strongest markets”. Accordingly, uncertainty among German customers could have a noticeable impact on business.
Cake Defi co-founder Hosp is considered equally dazzling and controversial in the fintech scene. The 35-year-old blockchain expert wanted to offer a crypto bank card with the start-up TenX, which was also founded in Singapore, and collected around $ 80 million from investors in 2017. After a year and a half, he surprisingly withdrew, and investors reacted angrily. In addition, it became known in the summer of 2019 that Hosp was once active in the Austrian company Lyoness, which was criticized as a pyramid scheme.
Should the Bafin come to the conclusion that Cake Defi is actually conducting unauthorized business, the authority has far-reaching powers to prohibit the continuation of operations and to order the liquidation of the existing business.
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