The Cyprus Securities and Exchange Commission (CySEC) recently blacklisted seven forex brands, one of which has already suspended trading. The regulator claimed that they were working without a license in the country.
Warning from the regulator
The Cypriot regulated warned investors from entering into transactions with the operators, suggesting that they were operating illegally in the country without proper licensing. It noted that some of the brokers were spinoffs of previously shutdown companies. Others were claiming to be affiliated with other brokers that are licensed by the CySEC and hold CIF licensing.
The blacklisted domains are
Of these, fxpb.us has already suspended trading services for the next 8 working days according to a statement on its website.
Is an exit scam in the making?
This incident could point towards an exit scam after receiving several warnings from the regulators. Forex forums are speculating that the exit scam could happen, taking away clients’ money. However, there is nothing concrete about the data yet.
FXPB touted itself as an ECN Forex broker which was authorized by various authorities in the European region like CySEC and the UK FCA. According to EU regulations, the maximum leverage available for users is only 1:30 while FXPB was offering leverages of up to 300x.
PrimaryFxMarkets, another broker on this list was working as a forex trading and asset management business which offered various forms of accounts with assured returns. It claimed to be regulated by the CySEC but the watchdog denied all such claims. It suggested that all the websites blacklisted by it were operating without licenses and were not associated/affiliated with a regulated entity. It emphasized that investors who lose money on these platforms will not be covered under the Investor Compensation Fund (ICF).
The regulator further stated that it previously believed these companies were based overseas and providing false addresses. It noted that it often becomes hard to identify the operators of a given website. The addresses provided as company headquarters are often offshore letterbox addresses.