The Federal Financial Supervisory Authority (BaFin) – the financial regulatory body of Germany – has reportedly released a public warning against the activities of crypto exchange platform Coinbene on May 28.

Specifically, BaFin accused Coinbene of paying a commission fee for “freelance” crypto traders to handle transactions for its clients. The financial regulator has claimed that crypto assets are classified as financial instruments, and any crypto-involved transactions need to be authorized by Germany’s Banking Act, or Kreditwesengesetz (KWG), before executing.

According to BaFin, Coinbene has not been registered in the nation’s commercial register yet and has also failed to acquire the compulsory legal licenses, demanded by the  KWG, for trading crypto assets.

CoinBene has issued a few responses, regarding its operations in Germany, as well as the allegations from BaFin about it hiring freelance crypto traders.

“We received numerous inquiries regarding our alleged hiring in Germany. But CoinBene is not planning to open any office nor hiring any representative in Germany. Nonetheless, we would like to thank those who actively reached out to us for your concern and understanding.”

CoinBene has previously been under suspicion for attempting a coverup of a hack. The crypto exchange has then denied all the accusations, claiming that the massive outgoing transactions were the result of ongoing maintenance.

Data scientists at blockchain infrastructure firm Elementus later confirmed that the assets outflow from CoinBene was “consistent” with activities found in a hack. However, the analysis report did not aim “to refute what CoinBene is claiming.”

David Brierley – CEO of Howdoo – claimed to have suffered 18.4 million worth of financial damage, all in uDOO tokens, during the hack at CoinBene. He is now seeking to press charges against the exchange.

Earlier this year, Federal Ministry of Finance (or BMF for short in German) released a key issues paper on the proposed treatment and regulation of blockchain-based securities, which is open to industry stakeholders for feedback, reported by The Crypto Sight on March 12.