Moribund FX broker ACFX selling its assets to British entity according to sources

On April 7 this year, retail FX brokerage ACFX, an acronym for Atlas Capital, was the subject of a license suspension by Cypriot financial markets regulatory authority CySec. A generic rationale was provided in a public report by the regulator as to why this action was taken.

Indeed, CySec cited that the firm had failed to comply with certain regulatory provisions, however it was not specified as to what exactly they were.

Just over six months have now passed since this action was taken, a period during which FinanceFeeds conducted an investigation into the company’s responsibilities towards its clients, and in particular, the processing of client withdrawal.

Whilst the stalemate surrounding withdrawals and the outstanding capital owed to clients continues with very little recourse for those owed money, the vast majority of the company’s senior management have long since left the firm.

FinanceFeeds recently interviewed staff, former employees, and clients with balances ranging from $1,500 to over $80,000 as withdrawals remain outstanding following the mass exodus from the firm by its management.

Today, further intelligence on the matter has appeared, with sources close to the matter having explained that a British firm has entered negotiations to buy ACFX.

A report in Eastern Europe has concluded “A British entity is taking over the company. On the subject of recent news surrounding ACFX in Cyprus, which for several years was controlled by Mr. Knezevic, and currently risks the permanent removal of its license to be able to operate in Cyprus, began a few months ago negotiations with the more eminent of legal entities about taking over the company and overall operations.”

“The deal was reached recently with the strategic partner from Great Britain who is already in the process of performing due dilligence” continued the report.

The report stated that ACFX had been party to an interview with Cypriot regulator CYSEC following the approval for the investor to continue with the process of the takeover of the company, as well as resolve all the problems that the company faced and that led to the suspension of the license.

“The future strategic partner will form a special team that will deal with resolving the created situation” announced Atlas Group.”

FinanceFeeds contacted ACFX CEO Petar Gazivoda in order to ascertain the validity of this and to gain a further perspective as to who the investor is and what structure such a deal may take, however no reply was proffered.

Additionally, FinanceFeeds contacted senior regulatory officials at CySec, who also did not provide a response.

In July this year, FinanceFeeds made contact with sources close to the matter to establish the whereabouts of certain members of the senior management who were at ACFX, as they have, according to our sources, been hired by LCG, a company which has had a revolving door approach to senior management recruitment since it was acquired by GLIO led by Charles-Henri Sabet in 2014.

In so many critically important ways, Cypriot financial markets regulatory authority CySec has made tremendous progress during the past year in terms of its responsibility to continue to foster a top quality business environment for Cyprus as the largest retail FX brokerage center in the world and continue to attract platform developers, liquidity providers, integration specialists and ancillary service vendors to nestle alongside the 180 brokerages on the island and ensure longevity of the industry whilst setting out a framework which supports brokerages, strengthens their mettle and protects consumers.

Noble indeed, and considering the rapidity at which Cyprus became a comprehensive center for international FX businesses and all of the top quality service providers that are required in order to operate a full and comprehensive trading ecosystem, CySec has done an admirable job of fostering a good business environment whilst demonstrating an increased intolerance for commercial misbehavior.

Sources close to the matter in mainland China have explained to FinanceFeeds that approximately 100 traders are awaiting their withdrawals, with requests dating back to the middle of March this year.

One particular trader, who is also an introducing broker, explained today to FinanceFeeds “As an example, one of my accounts at ACFX has a balance of $ 12,100 and I put my withdrawal request in for this account on March 28, 2016 however absolutely no confirmation of its receipt has been sent, and there is no withdrawal.”

A further client of ACFX in China said “I know that all of the ACFX customers that I am aware of on the mainland have not received any withdrawals from ACFX. Many of my clients have explained this to me, and there are groups with several ACFX customers that have several pending withdrawal requests.”

Indeed, a litany of complaints surrounding this matter now adorn public forums, indicating that the tardiness with regard to withdrawals is no longer limited to Chinese introducing brokers and their clients, but is now widespread across many region in which ACFX conducted its business.

During our investigation, FinanceFeeds contacted several clients who allege that they have been affected by this, as well as made investigations into the operational structure at ACFX by contacting existing and former employees of the company.

One particular trader that we spoke to recently is an experienced trader who holds accounts with several brokerages in various regions, including Australia, Cyprus, UK and Belize and explained to FinanceFeeds that he has never had any issues until now.

“Things got slow with withdrawals when I won large amounts (some hundreds of thousands USD) off another Cyprus broker in August 2015, then again in January 2016. This coincided with China Black Monday and the oil price drop plus commodity currency drops. There were reports of this happening on greater scale with much bigger traders than me” said the trader

“My balance, once I had everything closed was almost $84,000, which was a significant proportion of my trading capital (and personal wealth)”

Whilst CySec has made tremendous steps in the right direction recently in terms of strengthening its regulatory prowess, there is still some ground to make up. If Cyprus wishes to match established and well recognized financial markets centers such as Australia or North America, two regions in which the regulators have criminal prosecution and restitution powers, then more than just continual suspensions of licenses for firms which do not operate according to the law must be invoked, a case in point being the continued extensions of the suspension of ACFX’s Cyprus Investment Firm (CIF) license instead of actively resolving the matters outstanding.