The Cyprus Securities and Exchange Commission has announced that about 10 firms dealing in crypto and foreign exchange have been blacklisted by the country. According to reports, the agency is intensifying its efforts against unauthorized brokers.
In its statement, the agency said the blacklisted platforms were found guilty of offering illegal trading services in FX and digital assets without the necessary permission and authorization. In this round of blacklisting, the Cyprus SEC has also issued a new round of warnings against other unlicensed providers carrying out services in this sector of the industry.
Cyprus SEC clamps down on unauthorized platforms
According to the agency, some of these unlicensed firms and platforms are usually decisive users by claiming to be connected to other brokers that have been registered and under regulation in Cyprus. It noted that in other cases, these unauthorized platforms use the Cyprus Investment Firm (CIF) license awarded to these regulated firms to deceive users in the sector.
In response, the Cyprus SEC published a list of blacklisted platforms associated with these unauthorized providers. Some of them include fasat-g.pro and market-trading.ltd, iqforextrade.net, metaindextrade.net, viptradersclub.com, stockforexinvestment.com, and quantoria-markets.net. As the Cyprus SEC continues to double down on its attitude of adopting the best measures in terms of guidelines and operating regulations, certain aspects of the rules and operations have started to come into sharper focus.
One of the key changes to its regulation is that it has mandated every service provider dealing in digital assets to register with the Cyprus SEC. Firms of individuals that fail to adhere to the new regulation will face severe consequences. In addition, penalties for noncompliance have been pegged at a fine of up to $370,000 or custodial sentences lasting up to five years. In some cases, those found guilty may face a combination of both punishments.
The agency warns of gamification and “finfluencers”
According to a recent retail investment behavior research conducted by the Cyprus SEC, there has been a rise in what it considers unregulated, volatile investment products. The agency said the increase is alarming, as it shows that work still needs to be done to curb the sector of bad actors and criminal elements looking to rob unsuspecting victims of their hard-earned money.
The research also showed that only a few investors spend more than enough time researching the products they intend to invest in or the firm selling them, raising concerns that most investors do not understand the risks in the crypto industry. In the retail aspect, a quarter noted that they spend only 6-7 days researching a product, with 7% saying they spend less than 30 minutes or none at all on due diligence into a company before committing their money to invest in the product.
Meanwhile, only 30% of the respondents looked into the website of the country’s regulator to check if their broker’s website was licensed. 15% said they didn’t bother to check at all, while about 51% said they looked at company reviews before carrying out their transactions.
With most people afraid of missing out on the chance to make money from the crypto industry, regulators in Cyprus launched a campaign to educate its citizens on the potential risks involved in online trading. The campaign was backed by the country’s financial regulator, which warned platforms of using colorful apps that make trading look empowering instead of intimidating.
