The Cypriot regulator has warned against entering into transactions today, particularly involving CFDs, cryptocurrency and forex-trading, via online trading platforms operated by unlicensed providers.
The Cyprus Securities and Exchange Commission said before that some of these illegal brokers were just spinoffs of previously shuttered companies while others misleadingly claim affiliation with other brokers that are already regulated in Cyprus and hold its CIF License. The watchdog has blacklisted the following domains:
One of the blacklisted brokers, Ti-Gi, claims to be licensed in Belize but says it operates in accordance with the requirements of the Cyprus Securities and Exchange Commission (license number: 224/56).
CySEC stresses that these firms are not licensed to operate a brokerage business in Cyprus, nor are they affiliated with a regulated entity. Additionally, it warns that if consumers lost their money on platforms that are not licensed, they are not protected under the Investor Compensation Fund (ICF). This serves to protect the claims of covered clients and provide them with compensation, in case a member was unable to meet its financial obligations.
While many providers claim to be Cyprus-based, CySEC said it believes such companies were based overseas and providing false addresses, adding that it would look into taking further action if companies were actually based within the country. It further explains that it is sometimes hard to find the names of the platforms’ operators on their websites, and that the addresses given as the company headquarters are often offshore letterbox addresses.
The Cyprus financial watchdog warned in July that there was evidence of fraudulent impersonation of its officials who are engaged with firms under CySEC’s supervision.
The regulator cautioned the public about persons who approach clients of suspended brands, or those under investigation, claiming that they can help them recover their capital.
Under current laws, CySEC has no powers to force internet companies to refuse financial advertisements or block access to their domains. It can only ask them to take down fraudulent promotions once they have been spotted. As a result, fraudsters and promoters of high-risk schemes have been able to place advertisements claiming to be based or licensed in Cyprus.