MFSA Warns Against Two Unlicensed Crypto Exchanges


The MFSA has issued warnings against two cryptocurrency exchanges that claim to have valid licenses to operate in the country. 

March 29, 2020 | AtoZ Markets – Malta’s financial watchdog, the Malta Financial Services Authority (MFSA), has debunked the claims of two cryptocurrency exchanges of being licensed to operate in Malta. The MFSA called out the exchanges, ‘COINMALEX’ and ‘Crypto Foxtrades,’ in twin warnings on March 25, 2020.

The crypto exchanges claim that they have licenses to operate and are they regulated in the country. The nation’s watchdog, however, dismissed issuing a valid permit for the exchange.

MFSA warnings against COINMALEX & Crypto Foxtrades exchanges

COINMALEX’s “About Page” on its website, features a document which purports to be from the Malta Business Registry. This is a real institution within the small state. Also, the letterhead of the declaration shows the British royal coat of arms in prominence. This is a symbol that Malta quit using after she gained independence from Britain in 1964.

The MFSA warned that the entity might be dubious in nature, and urged investors to avoid doing any business with them; else they may risk losing funds.

“The MFSA wishes to alert the public, in Malta and abroad, that COINMALEX is NOT licenced NOR authorised by the MFSA to provide the service of an exchange or other financial services which are required to be licensed or otherwise authorised under Maltese law. Furthermore, information available to the MFSA suggests that COINMALEX is likely to be a scheme of dubious nature with a high risk of loss of money. The public should, therefore, refrain from undertaking any business or transactions with the above-mentioned entity”.

With Crypto Foxtrades, the claims are more outright than using a fake logo to authenticate documents. Crypto Foxtrades’ website declares that it’s a “licensed and regulated as a Category 3 Investment Services provider by the Malta Financial Services Authority.”

That is a valid category, but the MFSA has denied that Crypto Foxtrades is licensed under it. The warning is similar to that of COINMALEX. In it, the MFSA suggested that it was likely a scheme of dubious nature. Hence, the MFSA advise customers not to invest in them.

Recent warnings issued by the MFSA

On February 21, Malta’s chief financial watchdog said that it is yet to approve any Binance crypto exchange operations in the country. In their February 21 public statement, MFSA said that Binance does not have any legal authority to operate in the crypto sphere within the Authority’s jurisdiction.

The following day, Binance’s CEO Changpeng Zhao commented on the MFSA’s statement via Twitter. Binance’s own CEO explained, rather casually, that this is old news. He added that Binance’s lack of Maltese regulation has always been the case.

What do you make of the MFSA warnings against the crypto exchanges? Let us know in the comment section below.

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