{"id":68112,"date":"2020-03-04T19:29:49","date_gmt":"2020-03-04T17:29:49","guid":{"rendered":"https:\/\/www.lhr-law.de\/?p=68112"},"modified":"2024-10-23T16:38:08","modified_gmt":"2024-10-23T14:38:08","slug":"crypto-company-successfully-takes-action-against-bafin-notification-with-lhr","status":"publish","type":"post","link":"https:\/\/www.lhr-law.de\/en\/magazine-en\/media-law-personal-rights\/crypto-company-successfully-takes-action-against-bafin-notification-with-lhr\/","title":{"rendered":"Crypto company successfully takes action against BaFin notification with LHR"},"content":{"rendered":"

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\nThe German Federal Financial Supervisory Authority (BaFin) has deleted an illegal report on a crypto company initially published under the heading \u2018Unauthorised transactions\u2019 at the instigation of LHR. Claims for damages are currently being examined.<\/i><\/p>\n

The Wild West begins just behind Bitcoin<\/h2>\n

From our legal advisory practice, we know that parties involved in crypto business models are often wrongly targeted by more or less reputable journalists or other \u2018admonishers\u2019 with their own dubious interests. Sometimes these dubious actors even succeed in feeding the competent supervisory authorities, such as the German Federal Financial Supervisory Authority (BaFin), with incorrect information and thus inducing them to take unlawful measures or reports.<\/p>\n

This is exactly what happened to a company that was founded for the purpose of launching the operation or offering of certain crypto services and products and organising them internationally under its umbrella. Shortly after the company announced its market entry, a competitor, some crypto-affine news portals and a self-proclaimed \u2018specialised journalist\u2019 began to publicly discredit the project. In addition, the company was also smeared by the relevant supervisory authorities, in particular BaFin, with what later turned out to be false allegations.<\/p>\n

BaFin publishes unlawful report<\/h2>\n

The authority then publicly claimed on its website that the company in question was not an institution authorised in accordance with Section 32 KWG and Section 10 ZAG and did not have a licence to conduct these transactions in the Federal Republic of Germany. However, BaFin had no legal basis for this. Nor had it properly consulted the company beforehand, as it would have been obliged to do. The notification, which at first glance seemed inconspicuous, was grist to the mill of the above-mentioned \u2018critics\u2019, whose perfidious plan worked. They were able to use the report as a hook for further click-worthy \u2018reporting\u2019: They had always warned about it. Now BaFin is doing the same!<\/p>\n

BaFin preempts court decision by Frankfurt Administrative Court by cancelling<\/h2>\n

With the support of LHR, the company concerned has therefore filed an action with the Frankfurt Administrative Court against BaFin for the removal of the notification and an application for a temporary injunction (VG Frankfurt, Az. 7 L 452\/20<\/a>. F). Under pressure from the legal proceedings, BaFin immediately deleted the report. Unfortunately, BaFin’s move probably prevented a decision by the administrative court in the matter, which those responsible at the company would have very much welcomed due to its clarifying effect.<\/p>\n

The case file shows that the unlawful BaFin notification is based on deliberately untrue allegations by the above-mentioned \u2018critics\u2019.<\/p>\n

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LHR has successfully represented banks, issuing houses and capital market product developers in over 300 cases<\/strong><\/h3>\n

\"Lawyer<\/a>In recent years, we have conducted well over 300 proceedings for our clients against initiators of unlawful reporting, including not only dubious media, but also Stiftung Warentest, the Google search engine and numerous colleagues.<\/p>\n

Details here<\/a>.\u00a0<\/div><\/div>\n

In addition to the claims for injunctive relief, there are extensive claims for damages, the amount of which the company naturally cannot yet determine precisely, but which will be considerable due to the seriousness of the allegations.<\/p>\n

Lawyer Arno Lampmann from the law firm LHR:<\/p>\n

What many people do not know and what is apparently often overlooked by the responsible officials: As an authority, BaFin is bound by law. It may only do what it is explicitly authorised to do by law. Diffuse public (\u2018warning\u2019) notifications – especially without observing the administrative legal process – are not part of this.<\/p><\/blockquote>\n

UPDATE 20.5.2020<\/h2>\n