The regulator of Luxembourg’s financial markets, the Commission de Surveillance du Secteur Financier (CSSF), has warned that a firm claiming to be authorized under the name Crypto Capital Profits is in fact not licensed to carry out business from within its jurisdiction.
According to a public advisory, the CSSF warns about this crypto business, which operates under the website https://cryptocapitalprofits.com/ and claims to be supervised by the CSSF in Luxembourg.
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 states that CryptoCapitalProfits not been granted the required authorization to offer banking and financial services in 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. The local authorities pride themselves on the status of the country as a banking safe haven, and any company which declares itself as being registered or licensed by the CSSF is sure to be on the radar very quickly.
There are no specific cryptocurrency regulations in Luxembourg, but the country adopts European restrictions around similar products. The rules come within the implementation of the Fifth Money Laundering Directive (AMD 5), which provides a broad definition of crypto assets and qualifying it as “financial instruments.” Such a broad definition of financial instruments goes beyond cryptocurrencies to cover many related-assets, including security tokens.
Luxembourg also adopts European restrictions around retail trading products, including cryptocurrency derivatives. Specifically, the CSSF introduces tiered leverage for retail clients, dropping CFDs on major pairs to 30: 1 while other CFDs shrink to 20: 1. Commodities and non-major indices trade with 10: 1 or lower leverage while cryptocurrencies take the biggest hit, dropping to 2: 1.
Under AMLD5, crypto exchanges and custodian wallet providers were brought within the scope of EU anti-money laundering rules. The law imposes registration and customer due to diligence requirements that force operators to disclose their traders’ identities and report suspicious activity.
Some crypto providers had no choice but to cease operations as Europe is gradually tightening the rules for the crypto space.
Luxembourg is home to Bitstamp which celebrated its eleventh year in operation, making it the longest-running crypto venue in a sector plagued by hacks and exit scams. The exchange is currently ranked 13rd in terms of total trade volume, according to the latest data provided by CoinMarketCap.
In 2016, Bitstamp received a publicity boost after it obtained a license to operate as a fully regulated payment institution (PI) in Luxembourg. At the time, Bitstamp touted the license as a factor that enables it to become the first fully licensed cryptocurrency exchange in Europe.
