81 illegal Forex dealers in Russia, central bank reveals

July 23, 2019 | AtoZ Markets - According to the Russian news agency report, the Central Bank of the Russian Federation has detected 81 illegal Forex dealers in the first half of the year. 

The State Bank has detected 81 illegal Forex dealers in Russia

In an interview with the local news agency TASS, Valery Lyakh, Head of the Bank of Russia’s Department for Countering Malpractice revealed, that out of 81 detected entities, around 38 targeted Russian clients from abroad. As Lyakh explained further, the aforementioned companies were reaching Russian-speaking customers via their websites. 

The Central Bank’s official detailed, that illegal Forex brokers schemes remain the same. The scammers usually pretend to be active in the FX market falsely claiming that their clients have profitable accounts. However, according to Lyakh, when the customers decide to withdraw their funds, the account gets blocked or shows a zero balance. 

After fraudsters collect their customers’ funds, they stop responding to their phone calls, the bank’s representative concluded. To attract clients, as Lyakh added, scammers usually offer their customers to trade with a leverage of up to 500%, which is about 10 times higher than the allowable level of the ratio of borrowed funds to own.

The Russian Central bank is against illegal Forex brokers

As the local media reports, in the first quarter of 2019, the Federal financial institution of Russia received 69,600 complaints about clients of financial services providers. A number is 2.2% higher than in the corresponding period a year earlier.

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The experts assumed, that the main reasons for the rise include an increase in the number of complaints about credit providers.

Notable, that the number of complaints regarding financial market participants, including Forex dealers, was not significant in the first quarter of 2019. These amounted to 370 complaints. Of the total, complaints about Forex dealers accounted for 9%.

Could this be seen as an indicator of the health of the Russian Forex industry? Hardly, especially as the number of entities offering Forex services in Russia without a license remains substantial. However, it is worth to mention, that the Russian financial authorities have already taken an initiative to tighten the noose on the Russian illegal forex dealings.

Notable, that the Central Bank began to regulate Forex dealers only in 2017, during the “official launch” of the forex market in Russia.

Last year, the financial institution revoked the licenses of the five largest Russian Forex dealers - Forex Club, Fix Trade, Trustforex, Alpari Forex, and Teletrade Group, to repeated violations during the year, as the bank official explained.

Against the background of the tightening Forex regulations in the country, Russia’s State Duma may also impose administrative responsibility for mining cryptocurrency

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