While it is clear that Cyprus has become the Mecca for retail FX, with 154 brokerages primarily focusing on foreign clients with literally no domestic clients, knowledgeable workforce and a great commercial framework for all interconnected branches, there is still one big issue with all of this.
This smallish island has had a very rapid growth in terms of FX infrastructure which was done amazingly fast and efficient. It took Cyprus six years to create that influence and framework which is quite an amazing accomplishment, no one can deny that.
Perhaps, one of the biggest reason why this area is of so much interest to brokerages is the fact that it is literally the only region in the world where the entire retail FX workforce is congregated, has easy-to-follow entry protocols and it is a part of the European Union, which means that CySEC is under the directives of MiFID and other ESMA directives.
All of the above has made Cyprus a very attractive place when it comes to the acquisition of clientele than the what happening just a few years before with unregulated b-book companies.
However, it seems things are not as rosy as would be expected. The European Securities and Markets Authority (ESMA) considers Cyprus to belong to the very short list of countries that are actually non-compliant with the European directives.
CySEC (Cyprus Securities and Exchange Commission) was approached about this matter several times but also about the fact that IronFx along with other binary options companies is allowed to continue with their business despite the serious allegations against them. Also, why are those same companies, when sanctioned, only reprimanded or ‘’punished’’ with an insignificant fine?
CySEC’s response to those inquiries has been practically nonexistent, while they continue to explain that they do not possess restitution or criminal prosecution powers. They have, however, recently revoked several licenses, but none were of IronFx.
IronFx still has full license to conduct business and very aggressively target its potential customers, despite a huge flag being waved above it, in the shape of $176 million in unpaid client withdrawals and 1.6 million Euro unpaid taxes to the Cyprus government.
The question remains the same. Why are some companies allowed to continue to do business despite the massively serious and criminal legal issues they are involved in.