CySEC Blacklists 19 Unauthorized Crypto Brokers to Protect Investors

The Cyprus Securities and Exchange Commission (CySEC) has recently taken a significant step in protecting investors by blacklisting 19 unauthorized crypto brokers. This move is part of a broader effort to crack down on unlicensed financial services providers operating within the region. The blacklisted firms were found to be offering services without the necessary authorization, posing a risk to unsuspecting investors.

CySEC's action underscores the growing concern over the proliferation of unauthorized financial services in the crypto space. The commission has been vigilant in its efforts to ensure that only licensed and regulated entities operate within its jurisdiction. By blacklisting these 19 brokers, CySEC aims to safeguard investors from potential fraud and financial loss. The move also sends a clear message to other unlicensed operators that such activities will not be tolerated.

The blacklisting of these brokers is a proactive measure to enhance investor protection and maintain the integrity of the financial markets. It is part of a broader regulatory framework that seeks to balance innovation with the need for robust oversight. The commission's actions are in line with global trends where regulatory bodies are increasingly focusing on the crypto and forex sectors to prevent financial crimes and protect consumers.

Investors are advised to conduct thorough due diligence before engaging with any financial services provider. It is crucial to verify the legitimacy and regulatory status of brokers to avoid falling victim to scams. CySEC's blacklist serves as a valuable resource for investors, providing a list of entities to avoid. The commission encourages the public to report any suspicious activities or unauthorized financial services to aid in its enforcement efforts.

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.

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.

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.