Russian c-bank nears closure of investigation into fraudulent Forex companies

Maria Nikolova

The central bank will soon publish the results of its investigation into a number of fraudulent Forex brokers.

The Central Bank of Russia is nearing completion of its investigation into a number of fraudulent Forex companies. According to Valery Lyakh, Head of the Bank of Russia’s Department for Countering Malpractice, who was speaking to Russian newspaper “Rossiyskaya Gazeta”, the regulator will soon publish the results of its probe into a number of illegal Forex dealers (the official designation for Forex brokers in Russia).

The entities in question have no licenses to offer Forex services in Russia and are targeting Russian clients using foreign websites. The damage caused by their activities exceeds several billion rubles.

Although countering the activities of these entities is difficult, the Bank of Russia has managed to transfer 142 cases of illegal FX companies to the prosecutors’ office last year. Mr Lyakh said that the Bank of Russia is seeking to accelerate and simplify the procedure for blocking of websites of scammers.

The Central Bank is pushing for more powers when it comes to taking down or blocking access to such fraudulent websites. A bill drafted by the Ministry of Сommunications and Mass Media proposes amendments to the Law “On Information, Information Technologies and Information Protection”. The bill aims to help the Russian authorities tackle financial fraud executed via the Internet. Quite often, Russian clients are targeted by foreign companies who offer their services through online platforms without having offices in Russia and without having the necessary Russian licenses.

The bill will grant the Bank of Russia powers to block access to websites of fraudulent financial companies, including non-licensed overseas FX entities, targeting Russian clients. In September last year, the Ministry of Economic Development published a positive assessment of the bill.

Companies willing to offer OTC FX services to Russian clients have to obtain Forex dealer licenses from the Russian central bank. Thus far, only eight companies have done so.

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