- CySec issued a warning to its citizens from entering into the transactions involving contracts for difference, cryptocurrency, and forex trading from any unlicensed trading platform.
- Cysec had taken similar action in the year 2019 where they went ahead and even banned the unregistered trading platforms.
Cyprus has been dealing strictly with unlicensed trading platforms since 2019. And on Thursday, the Cyprus Securities and Exchange Commission (CySec) issued a warning to its citizens from entering into the transactions involving contracts for difference, cryptocurrency, and forex trading from any unlicensed trading platform. Cysec had taken similar action in the year 2019 where they went ahead and even banned the unregistered trading platforms.
CySec has mentioned that few of the exchange platforms and brokers are simply the spinoff of those previously shuttered companies. CySec has also stated that many brokers are misleadingly claiming their affiliations that are regulated in Cyprus and have their CIF License. CIF is the most important tool that a firm or exchange should have if they want to expand their services in the European nation of Cyprus.
The watchdog of the country has blacklisted a few domains that violated the above-mentioned norms.
CySec’s fight against offshore-based firms
They have extensively stressed that the above firms were not licensed by any legal body of the nation to do brokerage business in Cyprus. Not only this, these firms claim to be affiliated to a regulated entity which was also false at all levels.
Cysec has waned their citizens to hold any kind of business transaction or whatsoever with these firms. And if while doing so customers find themselves amidst any fraud or illegal activities. Then their interests are not protected under the Investor Compensation Fund (ICF) as these firms are not licensed. ICF is a body which serves on protecting the claims of those covered clients and also provides them compensation in the scenario when a case member is unable to meet the financial obligations.
It was last year only when Cysec has changed the covering claim policy and made it to 90 percent of the cumulative covered claims or €20,000, whichever amount up to be the lower sum. CySec has already seen its share of unlicensed crypto firms in the country. That is the main reason why the monitoring and assessment of the crypto companies and their activities have begun by the authorities.
They have already increased the oversight by integrating EU anti-money-laundering rules into the Cypriot laws. They have already revealed details about the efforts to regulate the crypto assets in 2019 and hinted that more discussions are to come in the future.
Amidst this, the main concern for Cyprus still lies that companies which are based overseas provide false addresses and certain action has to be taken against them.