Russian c-bank identifies 395 illegal Forex dealers in 2020
The Central Bank of Russia today published a report on its efforts to tackle illegal activities in the financial market.
In 2020, the regulator identified a total of 1,549 entities that conduct unauthorized activities in the Russian financial market. Illegal FX dealers accounted for 25.5% of the total.
The Bank of Russia discovered the bulk of the unauthorized FX dealers (199) in the final quarter of 2020. These illegal entities made use of the second wave of the pandemic and the growing popularity of online-based services. Most illegal FX dealers sought to lure investors via the Internet, most often via messengers, Skype and IP telephones.
Nearly 30% of the illegal FX firms claimed to be registered abroad – in the UK, the Marshall Islands, St Vincent & the Grenadines, etc. The Bank of Russia explains that such entities are not supervised by it and are outside of the scope of the Russian regulation.
There are only several licensed Forex dealers in Russia. In December 2020, the Central Bank of Russia announced the annulment of the Forex dealer license of PSB-Forex. The reason for the regulatory decision was a request submitted by the broker itself.
Early in 2020, PSB-Forex was put up for sale by its parent company, with the start price for the broker being RUB 149 million. All of the share capital of PSB-Forex was offered for sale. However, the sale process attracted no bidders.
PSB-Forex was one of the handful of firms that have Forex dealer licenses in Russia. In December 2018, the Central Bank of Russia annulled the licenses of several Russian FX brokers, including Alpari, Forex Club and TeleTrade. In its official announcement back then, the Central Bank explained that the licenses of five companies – Forex Club, Alpari Forex, Trustforex, Fix Trade, and TeleTrade Group, were taken away due to the companies’ violations of the Russian law.