The Financial Commission offers users protection of up to €20,000 in case of a dispute with a broker member.
The Financial Commission has announced that the membership status of EGMarkets has ceased following a breach of contractual obligations.
The external dispute resolution (EDR) organization requires member firms to strictly adhere to its rules in order to maintain membership with the Financial Commission.
The breach of contractual obligations and the subsequent ousting of EGMarkets as a member means that the broker’s clients will not be eligible for reimbursement from Financial Commission’s compensation fund.
The compensation fund can only be used by clients of approved members, and is subject to the ruling by the SRO’s Dispute Resolution Committee. EGMarkets is no longer a member, so its clients are no longer protected.
The compensation fund is designed to help protect members’ clients in exceptional cases and is funded by the Financial Commission from a portion of membership dues.
Financial Commission notes that it will not be able to process any new complaints from EGMarkets clients’, following its expulsion from the Financial Commission as of the date of this announcement and moving forward.
EGMarkets, also known as Eagle Global Markets, is a Nigeria-based FX and CFD broker catering to retail traders. The brokerage firm still hasn’t updated its website as it still claims to be a member of The Financial Commission.
In 2021, the external dispute resolution (EDR) organization dropped Lotas Capital as a member following a breach of contractual obligations.
Earlier this year, FinaCom pointed to a company called CRYPTO-FUTURE as an unlicensed trading provider, cautioning all retail investors about the risks of dealing with it.
Although the FinaCom didn’t provide further details, the aforementioned company seems to be a fraudulent business. Specifically, CRYPTO-FUTURE website claims to offer crypto investment plans, with returns ranging from 50 percent to 100 percent after 24 to 48 hours, which raises a red flag as far as investors are concerned.
As one would expect, sites such as CRYPTO-FUTURE operate as a High Yield Investment Program (HYIP) scheme where returns are always questionable, though they tend to dry up long before the original investment amount is repaid.
The company provides no legitimate proof of payouts, and it is likely no one will ever see any money. A glance at the website in question also reveals that the exchange does not confirm licenses held in any jurisdictions either.
The FinaCom has been sharpening its focus on retail investment and trading brokers in recent months. The regulator not only tries to protect consumers from FX scammers, but also has a dedicated tool to help cryptocurrency investors check if an investment opportunity is a scam.
Dubbed ‘Blockchain Warning List,’ the service provides information about the potentially damaging behavior of certain digital asset providers. The entries in this list include crypto exchanges and wallets suspected of conducting illegal activities depending on reports and complaints filed by their customers.
And while the regulator recommends that investors use its database of member brokers and check their disciplinary records, it adds that its services for traders are offered absolutely free.
The FinaCom also notes that it only investigates claims that are filed against a member firm, where its Dispute Resolution Committee (DRC) uses a proven method to process complaints and deliver a decision. Financial Commission does not service customers of brokers who are not members, thus it cannot process complaints against non-members and no further action will be taken if the broker is not part of the organization.