20 February, 2020 | AtoZ Markets – The Bank of Russia has eliminated competition from the entire FX market of the country after having decided to ban trading license of several FX brokerage firms. In recent months, Russia has sought to crack down on the crypto and FX industries, which have long flocked to other jurisdictions. As part of its crackdown, the Russian central bank identified 140 companies at the start of last year that could illegally offer foreign exchange services to local consumers.
Russian Forex Dealers Complaints Dropped Across The Board
Russian financial regulators have observed a continued decline in customer complaints about forex broker that provide licensed OTC FX services to Russian residents. The Russian Central Bank has also analyzed the complaints it received throughout 2019 against financial services companies. According to the study, complaints received in general were 246,600, down by 2.8% from the previous year.
Complaints against securities brokers reached only 1,000, almost 30% less than the 1,439 complaints received in 2018. Out of this number, the mega regulator also received only 40 complaints from dissatisfied clients against OTC FX brokers.
Complaints against Russian forex dealers accounted for 4% of all complaints against professional financial market participants in 2019. This figure should be compared with the proportion of 2.1% recorded a year earlier. However, there are currently only four authorized FX dealers in Russia.
The interest of Russian investors in speculative products has diminished due to strict FX exchange regulations and RCB’s efforts to limit the marketing of these products. The recent crackdowns are also pushing traders to move away from licensed brokers in Russia to open accounts in offshore jurisdictions.
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Russia Warns Against Several Illegal FX Dealers
In October 2019, the Federal Financial Monitoring Service of Russia issued a warning regarding several FX dealers that illegally offer online trading services to Russian investors.
According to the regulator, these entities abuse the insufficient knowledge of the Russians on the securities market regulation and solicit investments. Typically, fraudsters create a facade whereby investors’ deposits increase as a result of earnings and demand additional investments. Then, any attempt to withdraw clients money, the balance suddenly becomes “zero”, and the company stops communicating with its customers.
According to the regulator, the companies which most frequently engage in such fraudulent activities concerning the Russian market are:
- Teletrade
- GRANDCAPITAL
- Delloy Trаde
- GLOBAL FX
- Kappabrokers
- GO CAPITALS FX
- KBCapitals
- 10 BROKERS
- Swis Trade
- BORN to TRADE
- Barclays Trade
- WerCrypto
These are non-Russian companies and do not have the required licenses or are members of self-regulatory organizations. More generally, the Russian Central Bank says that fewer Russians are now involved in illegal financial transactions.
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