Cyprus watchdog adds ACMarketsFX, Easycapitaltrade and Smarttradefx to caution list
The Cypriot regulator has warned against entering into transactions today, particularly involving CFDs, cryptocurrency and forex trading, via online trading platforms operated by unlicensed providers.
The Cyprus Securities and Exchange Commission said before that some of these illegal brokers were just spinoffs of previously shuttered companies while others misleadingly claim affiliation with other brokers that are already regulated in Cyprus and hold its CIF License. The watchdog has blacklisted the following domains:
CySEC stresses that these firms are not licensed to operate a brokerage business in Cyprus, nor are they affiliated with a regulated entity. Additionally, it warns that if consumers lost their money on platforms that are not licensed, they are not protected under the Investor Compensation Fund (ICF). This serves to protect the claims of covered clients and provide them with compensation in case a member was unable to meet its financial obligations.
While many providers claim to be Cyprus-based, CySEC said, previously it believed such companies were based overseas and providing false addresses, adding that it would look into taking further action if companies were actually based within the country. It further explains that it is sometimes hard to find the names of the platforms’ operators on their websites, and that the addresses given as the company headquarters are often offshore letterbox addresses.
Under current laws, CySEC has no powers to force internet companies to refuse financial advertisements or block access to their domains. It can only ask them to take down fraudulent promotions once they have been spotted. As a result, fraudsters and promoters of high-risk schemes have been able to place advertisements claiming to be based or licensed in Cyprus.
Today’s warning comes barley two weeks after the Cypriot watchdog hit the operators of Maxigrid Limited with regulatory bans and fiscal penalties for violations of the local Investment Services and Activities and Regulated Markets Law.
In relation to the fine, CySEC stated that Maxigrid, which operates the brands Dualix & AGM Markets, breached its conduct of business obligations when providing investment services to clients. It has also failed to submit financial accounts and other information required by CySEC in a complete and accurate manner.
The watchdog blamed the company’s shareholder and former non-executive president of board, Roy Almagor, and executive directors Jekaterina Pedosa and Katerina Papanicolaou over their omission and negligence during their time in office.