Disclaimer: in keeping with the announcement on which this article is based, as well as the wishes of US exchange, CoinBene, of which the organization described in this article seems to be a clone, the appearances of “CoinBene” referring to operations in Germany have been changed to “Coinbene LTD Deutschland” as of 06/27/2019.

The Federal Financial Supervisory Authority (BaFin), Germany's financial regulator, has issued a public warning about cryptocurrency exchange Coinbene LTD Deutschland on May 28.

The watchdog says that Coinbene LTD Deutschland has been recruiting freelance crypto traders who get paid on commission. BaFin states that since crypto assets are financial instruments, trading them requires authorization under Germany’s Banking Act, or Kreditwesengesetz (KWG).

BaFin states that Coinbene LTD Deutschland is not listed in Germany’s commercial register and has not obtained proper licensure for trading crypto assets as required by the KWG.

CoinBene has previously responded to inquiries regarding its presence in Germany, denying that it was hiring freelancers in an official Twitter post:

“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.”

As previously reported by Cointelegraph, CoinBene has been suspected of covering up a hack. The exchange has denied the claims, stating that the flow of outgoing funds was the result of ongoing maintenance.

Data scientists at blockchain infrastructure firm Elementus subsequently found that the details about the outgoing transactions were consistent with those that would be seen in a hack. However, the analysts stated that their findings did not refute CoinBene’s claims.

David Brierley, CEO of Howdoo, claims to have lost 18.4 million of the company’s token uDOO ($209,000) in the process and is reportedly seeking to file a class action suit against the exchange.

CoinBene is the eight-largest cryptocurrency exchange by adjusted trade volume at press time, according to data from CoinMarketCap. CoinBene’s current trade volume is $1.63 billion.