Luxembourg’s financial market regulator, the Commission de Surveillance du Secteur Financier (CSSF), has warned that a company claiming to be licensed as Crypto Capital Profits is in fact not authorized to do business in its jurisdiction.
According to a public notice, the CSSF warns against this crypto business, which operates under the site and claims to be supervised by the CSSF in Luxembourg.
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The announcement also reveals that the aforementioned entity has published false data about its alleged headquarters at 2, place de Paris, 2314 Luxembourg. The regulator further clarifies that CryptoCapitalProfits has not obtained the required authorization to offer banking and financial services in Luxembourg or from Luxembourg and is therefore not supervised by the CSSF.
This is not the first time that the CSSF has encountered websites falsely claiming to have something to do with Luxembourg. Local authorities pride themselves on the country’s status as a banking haven, and any business that claims to be registered or approved by the CSSF is sure to be on the radar very quickly.
There are no specific regulations on cryptocurrencies in Luxembourg, but the country adopts European restrictions around similar products. The rules are part of the implementation of the Fifth Money Laundering Directive (AMD 5), which provides a broad definition of crypto assets and qualifies them as “financial instruments”. Such a broad definition of financial instruments goes beyond cryptocurrencies to cover many related assets, including security tokens.
Luxembourg is also adopting European restrictions on retail products, including cryptocurrency derivatives. Specifically, the CSSF is introducing tiered leverage for retail clients, reducing CFDs on major pairs to 30:1 while other CFDs reduce to 20:1, dropping to 2:1.
Under AMLD5, crypto exchanges and custodian wallet providers have been brought within the scope of EU anti-money laundering rules. The law mandates registration and customer due diligence requirements that require operators to disclose the identity of their merchants and report suspicious activity.
Some crypto providers had no choice but to go out of business as Europe gradually tightens the rules in the crypto space.
Luxembourg is home to Bitstamp which celebrated its eleventh year in business, making it the longest running crypto site in an industry plagued by hacks and exit scams. The exchange is currently ranked 13th in terms of total trading volume, according to the latest data provided by CoinMarketCap.
In 2016, Bitstamp received a publicity boost after obtaining a license to operate as a fully regulated payment institution (PI) in Luxembourg. At the time, Bitstamp touted the license as a factor in becoming the first fully licensed cryptocurrency exchange in Europe.
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Luxembourg Regulator Warns Of Crypto Capital Profits
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