Russian Central Bank Flags 812 Illegal FX Brokers in 2021

The Central Bank of Russia said on Wednesday that it has busted as many as 812 foreign exchange (forex) dealers in 2021 that were operating in the country illegally. These
 
 online trading 
platforms positioned themselves as forex brokers and were trying to onboard Russian clients.

The action against these
 
 forex 
platforms came in as a part of a wider crackdown against illegal financial companies. Overall, the central bank identified 2,679 such illegal platforms. Among them, 871 were pyramid schemes, 860 impersonated themselves as professional participants in the securities market and the rest 948 companies were illegal creditors. In 2020, the market supervisor flagged only 222 pyramid schemes and 395 illegal securities market dealers.

From the numbers, it was clear that the illegal activities in the financial markets last year jumped significantly.

A Tight Market

Forex brokers in Russia need to obtain a license from the central bank to operate in the country. However, the locally-regulated market is very small as only four Russia-licensed forex dealers: BCS-Forex, VTB Forex, Alfa-Forex, and FINAM Forex.

Though several internationally regulated reputed brokerage companies are also targeting Russian traders, the local regulator seems to be turning vigilant towards non-local entities. Last year, the central bank published a long list of blacklisted companies that contained the names of 1,820 financial services companies, including some of the well-established international forex brokers.

“We recommend that people be more attentive, analyze and evaluate all financial proposals, especially those related to investments. Investing always involves risk. Therefore, it is necessary to use the services of only real professionals licensed by the Bank of Russia,” Valery Lyakh, Director at the Bank of Russia’s Department for Combating Unfair Practices, said (translate from Russian).

The Central Bank of Russia said on Wednesday that it has busted as many as 812 foreign exchange (forex) dealers in 2021 that were operating in the country illegally. These
 
 online trading 
platforms positioned themselves as forex brokers and were trying to onboard Russian clients.

The action against these
 
 forex 
platforms came in as a part of a wider crackdown against illegal financial companies. Overall, the central bank identified 2,679 such illegal platforms. Among them, 871 were pyramid schemes, 860 impersonated themselves as professional participants in the securities market and the rest 948 companies were illegal creditors. In 2020, the market supervisor flagged only 222 pyramid schemes and 395 illegal securities market dealers.

From the numbers, it was clear that the illegal activities in the financial markets last year jumped significantly.

A Tight Market

Forex brokers in Russia need to obtain a license from the central bank to operate in the country. However, the locally-regulated market is very small as only four Russia-licensed forex dealers: BCS-Forex, VTB Forex, Alfa-Forex, and FINAM Forex.

Though several internationally regulated reputed brokerage companies are also targeting Russian traders, the local regulator seems to be turning vigilant towards non-local entities. Last year, the central bank published a long list of blacklisted companies that contained the names of 1,820 financial services companies, including some of the well-established international forex brokers.

“We recommend that people be more attentive, analyze and evaluate all financial proposals, especially those related to investments. Investing always involves risk. Therefore, it is necessary to use the services of only real professionals licensed by the Bank of Russia,” Valery Lyakh, Director at the Bank of Russia’s Department for Combating Unfair Practices, said (translate from Russian).

Source: https://www.financemagnates.com/forex/regulation/russian-central-bank-flags-812-illegal-fx-brokers-in-2021/