CySEC warns of Royal FX Bank, Tradeoptfx
The Cyprus Securities and Exchange Commission (CySEC) has intensified its efforts to combat unauthorized brokers by issuing yet another warning against multiple unlicensed providers.
These providers have been blacklisted for offering trading services in foreign exchange (FX) and cryptocurrencies without the necessary authorization from CySEC.
CySEC has also highlighted that some of these unlicensed brands are deceptively claiming affiliation with other brokers that are already regulated in Cyprus and hold the Cyprus Investment Firm (CIF) License. In response, CySEC has published a list of blacklisted domains associated with these unauthorized providers.
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.
Key among these changes is the obligation for every service provider dealing with crypto assets to register with the CySEC. Firms or individuals failing to adhere to this new stipulation will face severe consequences. Penalties for noncompliance range from hefty fines, potentially reaching up to €350,000 ($370,000), to custodial sentences lasting up to five years. In some cases, violators may face a combination of both fine and imprisonment.
CySEC warns of ‘gamification’ and “finfluencers”
CySEC has recently released retail investment behaviour research showing what it views as a concerning rise in unregulated, volatile investment products.
The research also showed that too few spend enough time researching the products they plan to invest in or the firm selling them, raising concerns that investors did not understand the relevant risks. Of the retail crowd, a quarter revealed that they spent 6-7 days researching a particular product, 7% said they did less than 30 minutes due diligence or none at all before committing their money to a product.
Meanwhile, only 30% of all respondents looked up their broker on the website of the country’s regulator to check it was licensed. While 15% didn’t do any checks at all, more than half (51%) said they looked at company reviews or the firm’s own website.
With many people afraid of missing out on the chance to make easy money, Cypriot regulators also launched a campaign to educate its citizens on the potential risks involved when it comes to online trading.
The country’s financial regulatory body was behind the campaign, which warns of using colorful apps that make trading seem empowering instead of intimidating.