CySEC cancels EuropeFX license for mishandling client funds

abdelaziz Fathi

The Cyprus Securities and Exchange Commission (CySEC) confirmed on Tuesday that it has wholly withdrawn the Cyprus Investment Firm (CIF) License of FX retail brokerage firm Maxiflex Ltd (trading as EuropeFX).

According to the regulatory manifest, Maxiflex has had its CIF authorisation withdrawn based on multiple violations of the local investment laws.

In particular, Maxiflex was flagged for not keeping client funds in entirely separate accounts from the company’s own money, as the relevant regulations require any brokerage firm that holds custody of its client’s assets.

“CySEC reached to the above decision, due to the Company’s non-compliance with article 22(1) of the Law, as the Company is in violation of article 22(1) of the Law, as to the continued observance of the licensing conditions set out in articles 11(1)(b) and 17(9) of the Law, regarding the suitability of the shareholder and the safeguard of the rights of clients and the prevention of the use of clients’ funds for its own account, respectively, and consequently does not comply anymore with the conditions for granting its authorization,” the statement reads.

EuropeFX was among a handful of Cypriot brokers that the UK’s FCA suspended their passporting rights in 2021. Shortly after the FCA’s crackdown, EuropeFX voluntarily turned their backs to the UK market and decided to cease providing any investment services to Britons.

Meanwhile, the CySEC statement announcing the license suspension further reads that EuropeFX parent does not appear to comply with the authorisation conditions concerning “suitability of members of the management body or shareholders,” and other organisational requirements.

The Cyprus watchdog reached a settlement with Maxiflex in 2020, ordering the firm to pay €370,000 for violating certain authorisation conditions. At the time, CySEC explained that the settlement resolves allegations of non-compliance with other articles that cover multiple regulatory requirements, including conflicts of interest and information provided to clients.

In addition, MAXIFLEX LTD was probed by CySEC for lack of compliance with regulatory requirements that govern the assessment of suitability and appropriateness of clients, as well as its obligation to execute orders on the most favourable terms to their customers.

At the time, CySEC ordered the company to take corrective measures within a set framework; otherwise, additional measures will be taken, such as the imposition of new fines and/or even the withdrawal of their licenses.

Read this next

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Bybit expands into Europe amid regulatory scrutiny

Dubai-based cryptocurrency exchange Bybit is expanding its operations in Europe after encountering regulatory challenges in Hong Kong.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

<