Interviewer (I): Good day, Mr. Reime. Thank you for taking the time for this interview. There are currently many offers and advertisements that promise a financial revolution through the so-called “decentralized financial system” (DeFi) and investments in digital currencies. How do you assess these offers from a legal perspective?
Attorney Jens Reime (JR): Thank you for the invitation. Such offers that lure with financial independence, passive income and high returns should be treated with caution. Even if the area of decentralized finance and cryptocurrencies has potential in principle, they are often highly speculative investments. The promises in these advertisements, such as “100% safe” or “guaranteed profits”, should make investors sit up and take notice. No investment is completely risk-free, especially not in a market as volatile as DeFi or cryptocurrencies. Here, a clear distinction must be made between reputable providers and potential fraud cases.
I: Many of these advertisements also advertise that the initial consultation is free and non-binding. How should potential investors deal with this? What can happen in such discussions?
JR: This is an important point. Such “free initial consultations” are often used to gain the trust of customers. In these discussions, pressure is often put on customers to act quickly and invest in order not to miss out on supposedly exclusive offers. Investors should be particularly cautious if they are asked to transfer money quickly or to disclose personal data. These discussions are often used to sell paid consulting or training offers that later encourage further investments. In such cases, it is important to find out as much as possible about the provider in advance and never be tempted to make rash investments.
I: Many offers, such as the “DeFi Power Innercircle” described above, promise not only quick success but also detailed instructions and coaching to turn laypeople into successful investors. What legal risks do you see here?
JR: A major problem is that many of these coaching offers do not have adequate financial oversight. While regulated financial markets have strict rules and regulations designed to protect investors, many of these offers operate in a legal grey area or completely outside of legal regulation. The promises of success, quick profits and passive income are often exaggerated. There are no guarantees in the financial world and these coaching programs often do not offer adequate protection if the investment fails. In addition, customers could unknowingly be lured into fraudulent schemes that ultimately aim to steal their capital.
I: Advertisements often emphasize that the traditional banking system is unsafe and that DeFi transactions can be carried out faster and more cost-effectively. What aspects should one pay particular attention to?
JR: While it is true that DeFi systems offer certain advantages, such as lower transaction costs and faster settlements, the risks should not be underestimated. The biggest difference from the traditional banking system is the lack of regulatory security. While banks and financial institutions are subject to strict regulations and protected by government deposit insurance, there are no guarantees in DeFi. Once the money is lost – be it through hacking, technical errors or fraudulent platforms – there are hardly any legal options to get it back. Investors should therefore think carefully about whether they are willing to take this risk.
I: The testimonials used in advertising convey the image of enormous profits in a short period of time. From a legal perspective, are there any special features that customers should pay attention to when such customer opinions or reviews are presented?
JR: Testimonials and success stories are a popular way to build trust and convince investors. But these should always be viewed with caution. Often they are selectively selected or even fake reports that do not reflect the reality of the majority of users. In many cases, these reports are designed to present extreme individual cases or even fictitious profits that give the impression that such successes are achievable for everyone. Investors should therefore not rely solely on such testimonials, but rather rely on objective information and external evaluations.
I: Finally, what advice do you have for people considering investing in DeFi or similar systems?
JR: My most important advice is to never invest without being informed. The DeFi market is very complex and requires in-depth knowledge to be able to assess risks. If you decide to invest, you should only invest money that you can afford to lose. It is advisable to only invest with reputable and regulated providers and not to fall for offers that promise quick and safe profits. In addition, you should always be skeptical if pressure is exerted or if no clear information is given about the provider or the legal framework. If in doubt, it is always advisable to seek legal advice before investing.
I: Thank you, Mr. Reime, for your detailed and helpful answers. I am sure that many potential investors will benefit from this advice.
JR: With pleasure! It is important to me that investors are well informed and protect themselves from risks
