CySEC flags Metexo, InstaForex clone, ETFX as scams

abdelaziz Fathi

The Cyprus Securities and Exchange Commission has once again stepped up its fight against unauthorized brokers.

The Cypriot regulator today published a warning against a slew of unlicensed providers, whose domains were just blacklisted for facilitating trading in FX and cryptocurrencies without being authorized to do so in the country. CySEC also sounded alarm bells after it spotted a fraudulent scheme imitating brand of regulated FX broker InstaForex.

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:

  • metexo.com
  • inforexeu.com
  • et-fx.com
  • nbimarkets.net
  • emporiumcapital.ltd

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 lose 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.

As CySEC’s attitude of adopting more stringent licensing guidelines and operating regulations becomes ever clearer, certain aspects of the rules and operations start to come into sharper focus.

Among those is what the regulator calls the requirements to provide investment and ancillary services and/or perform investment activities in a third country.

CySEC  sent a circular to its regulated brokers, in which it mentioned some basic rules that every broker has to obey. According to the watchdog, onboarding overseas clients now requires a broader set of features and the presence of an active regulatory approval to ensure soundness of operating in another jurisdiction.

However, the Cypriot regulator has opened both doors – flexibility in its legal requirements as well as the ability to restrict the CIF’s access to provide investment activities in a third country.

As such, the Cyprus Investment Firms (‘CIFs’) must now assess their existing third-country-passports and secure official documents to either confirm that they hold relevant authorisation, or to be granted relief from the obligation to hold such a licence in that territory.

Read this next

Institutional FX

Verto launches EM FX marketplace: NGN, ZAR, XAF, XOF, KES, GHS, UGX

“We’ve seen significant pent-up demand looking for counterparties, which is one of the reasons we’re launching this product. We built Verto Marketplace to directly address these systemic issues, offering a platform that provides the control, transparency, and cost-efficiency that traders, brokers, and corporate treasurers need.”

Payments

BVNK launches Swift payments to move between fiat and stablecoins

“Adding USD and EUR via Swift means that our customers can really take full advantage of stablecoins to speed up their money movement, wherever they are based – and they can easily get back into fiat currencies if and where they need to.”

Market News

Base metals could soon take off from the base again

Dive into our full analysis to understand the potential resurgence of base metals and what it could mean for your investment strategy.

Digital Assets

Global clamp down on crypto tax evasion to go live in 2027

“As jurisdictions that play host to active crypto markets, we therefore intend to work towards swiftly transposing the CARF into domestic law and activating exchange agreements in time for exchanges to commence by 2027.”

Digital Assets

Ripple and Archax team up for tokenization with XRPL

“There is clear real-world utility in use cases like RWA tokenization for the operational efficiency, access to liquid markets and transparency inherent to crypto, and Archax has already tokenized assets such as equities, debt instruments and money market funds. Financial institutions are now understanding this and we are excited to play our part in helping them to embrace the technology by bringing their assets onto the XRPL.”

Interviews

Acuity Trading at iFX EXPO LATAM: Andrew Lane on the rise of AI and prop trading

At iFX EXPO LATAM 2024, Acuity Trading’s Andrew Lane discussed the successful rollout of their Research Terminal, the impact of AI on the trading industry, competition from AI-powered solutions, emerging market trends in Latin America, and the rise of prop trading, while addressing regulatory challenges and innovations.

blockdag

Top Crypto Highlights for Q2 2024: BlockDAG’s Astonishing 1120% Growth Compared to Solana’s Surge and Toncoin’s Market Triumph

Explore the latest highlights in cryptocurrency: Solana’s recovery, Toncoin’s record levels, and the rise of BlockDAG’s innovative technology.

Digital Assets

Ripple seeks $10 million penalty citing Terraform fine in SEC case

Ripple Labs wants to reduce the financial penalties proposed by the U.S. Securities and Exchange Commission (SEC) by leveraging recent fines imposed on Terraform Labs.

Digital Assets

Swiss regulator shuts down CoinShares’ partially-owned FlowBank

Switzerland’s financial regulator, FINMA, has closed FlowBank SA and placed it into bankruptcy due to severe breaches of capital requirements and other supervisory laws. This follows a series of enforcement actions against the bank that began in October 2021.

<