CySEC Extends CIF License Suspension of FXGM Parent

abdelaziz Fathi

The Cyprus Securities and Exchange Commission (CySEC) today announced that it has continued the suspension of Depaho Ltd, which operates the retail FX brands GTCM, FXGM and TRADEAPP.

CySEC

Back in July, Depaho was initially flagged for non-compliance and had its license temporarily suspended by CySEC following several allegations of multiple violations.

CySEC now extends the punitive measures as the firm was still accused of acting contrary to investors’ interests, and more broadly the regular operation of capital markets. Depaho has until the end of September 2021 to comply with the CySEC provisions and apply to reactivate their license once more.

In particular, Depaho is accused of providing investment advice without obtaining prior authorisation to do so. The company also appears to have problem with its organizational requirements alongside lapses in implementing its conflicts of interest policy.

Citing the Article 25(1) of the law, CySEC’s statement further reads that Depaho didn’t act “honestly, fairly and professionally when providing investment services to clients, in accordance with the best interests of its clients.” By extension, the regulator alleges that the company doesn’t understand the financial instruments it offers nor assesses the compatibility of these products to clients.

The CySEC also raised concerns over Depaho’s marketing practices as its clients were not able able to understand the nature and risks of certain financial instrument the company recommends. Further, the broker was accused outsourcing its marketing activities to third parties and at times was misrepresenting the qualifications of its personnel to prospective clients.

Depaho Ltd is operating through its brand name FXGM and domain names www.depaho.com; www.fxgm.com; www.gtcm.com; www.tradeapp.com. Back in 2013, the company purchased the brand name FXGM and the domain name www.fxgm.com from FX Global Markets (FXGM), which in turn renounced its licence in the same year.

Depaho is obliged to take action within the specified deadline to comply with the necessary provisions then apply to reactivate its license once more. But while the license suspension is in force, the company is not permitted to enter into a business relationship with any person, accept any new customer, or provide any services.

In addition, Depaho must, if existing clients so wish, close any open positions about clients’ contracts (on time or earlier if the client wishes so). It will also be required to return to existing clients all of their funds and profits earned if the clients want to do so.

In the meantime, the company has to upload notices regarding the suspension of its license onto all of its sites, which in this case, has yet to take effect.

Read this next

Retail FX

Italian watchdog red flags Olympus Brokers, UnicoFX and Allfina Group

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

XTB revenues hits zł1.45 billion in 2022, Q4 earnings disappoint

Poland-based Forex and CFDs broker, XTB has reported its final results for Q4 of 2022 and the full fiscal year ending on December 31, 2022, showing one of its most successful corporate years.

Executive Moves

Lirunex Limited recruits Waleed Salah as head of MENA sales

Maldives-based brokerage firm Lirunex Limited has secured the services of Waleed Salah, who joined the company in the role of its head of sales for the MENA region.

Executive Moves

Trading 212 parts ways with co-founder Borislav Nedialkov

Trading 212 has a void to fill at its FCA-regulated business in London, following the departure of two key players, Raj Somal and Borislav Nedialkov.

Digital Assets

Binance acquires troubled crypto exchange GOPAX

Binance, the world’s largest digital asset trading platform, has reportedly acquired a majority stake in the troubled South Korea-based cryptocurrency exchange GOPAX.

Digital Assets

Kraken exits Middle East, closes UAE office

Digital currency exchange Kraken will close down its operations in Abu Dhabi, UAE and lay off the majority of its team focused on the Middle East and North Africa.

Industry News

CFTC comments on ION Cleared Derivatives issues after Russian-linked hack

“The ongoing issue is impacting some clearing members’ ability to provide the CFTC with timely and accurate data. As this incident unfolded, it became clear that the submission of data that is required by registrants will be delayed until the trading issues are resolved.”

Industry News

FCA took down 14 times more misleading ads in 2022 thanks to technology

The FCA has made significant improvements to the digital tools it uses to find problem firms and misleading adverts. These improvements have enabled it to work through a much larger number of cases compared with 2021.

Executive Moves

HKEX appoints ex-Goldman Sachs Matthew Cheong to lead platform’s focus on derivatives

“He has worked for a number of the world’s leading investment banks and his experience will be invaluable to HKEX as we continue to enhance our derivatives product offerings and build on our innovative and robust platform business, connecting capital with opportunities.”

<