Russian Central Bank blacklists major FX brokers and crypto exchanges

Karthik Subramanian

The Russian Central Bank has published a long list of companies that have ‘identified signs of illegal activities and they have been barred from carrying on business within Russia.

The list has more than 1800 companies and includes some highly renowned FX brokers that are licensed by other countries and this includes Alpari, Interactive Brokers, Swissquote, etc. The list also includes crypto firms and some binary options brokers as well.

Though many of these firms have licenses from other countries, they do not have a license to operate in Russia, and hence that is being given as the reason for blacklisting them. According to the Russian central bank, these companies have been noted to be running financial pyramid schemes, providing illegal lending, and also illegal participation in the securities market.

The announcement states that any such market participant should be duly licensed to provide financial services in the Russian Federation by the Bank of Russia or must be approved by the regulator. It is not clear why such an action has been initiated at this point and whether this a part of a larger scheme to clean up the financial services industry in Russia.

Though some of the larger FX brokers may be above board, it has to be accepted that many financial services companies in Russia have been accused of engaging in financial crime and the Bank of Russia and the Russian regulators have been criticized for being lax in implementing regulatory measures. So, if these measures are going to be part of a larger cleanup, then this needs to be welcomed as this would help in the growth of the industry in Russia in a proper, regulated environment in the long run.

The fintech industry in Russia has long been known to be pretty strong with its long line of very strong developers and so any coordinated and continuous activity to regulate the industry would be welcomed by all.

The announcement said that actions would be taken to block the websites of all these blacklisted companies and the Bank of Russia would be coordinating with the law authorities and the regulators from other countries to ensure proper compliance.

The announcement makes it clear that the Bank of Russia does not commit to making any payments to victims of financial fraud by any of these companies and it is more like a warning to the people to stay away from such companies in the future.

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