Russian c-bank detects 81 illegal Forex dealers in H1 2019

Maria Nikolova

Some 38 of these companies targeted Russian clientele from abroad, Head of the Bank of Russia’s Department for Countering Malpractice told TASS in an interview.

The Central Bank of Russia has detected 81 illegal Forex dealers (the official designation of OTC FX brokers in Russia) in the first half of 2019. The data was provided by Valery Lyakh, Head of the Bank of Russia’s Department for Countering Malpractice, in an interview with Russian information agency TASS.

Mr Lyakh explained that, out of these 81 entities, 38 were operating from abroad. They targeted Russian-speaking clientele via their websites.

The fraudulent schemes remain the same – the companies pretend to be active in the FX market, they falsely claim that clients have profitable accounts, but when one decides to withdraw one’s money, the account gets blocked or shows a zero balance. Then the company stops responding to the clients’ phone calls.

During the first quarter of 2019, the central bank received 69,600 complaints about clients of financial services providers, a number which is 2.2% higher than in the corresponding period a year earlier. The main reasons for the rise include an increase in the number of complaints about credit providers.

Regarding the enquiries concerning financial market participants, a group which includes Forex dealers (the official designation for OTC FX firms in Russia), the number of complaints regarding such entities was not significant in the first quarter of 2019. These amounted to humble 370 complaints. Of the total, complaints about Forex dealers accounted for 9%.

The small number of complaints about Russian FX dealers, however, may hardly be seen as an indicator of the health of the Russian Forex industry. Especially as the number of entities offering Forex services in Russia without a license remains substantial. Let’s recall that, in March this year, the Russian Association of Forex Dealers, a self-regulatory organization for the FX industry in Russia, has detected a number of illegal Forex entities operating from the “Moscow City” finance center.

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