UK’s FCA Issues Warning Against Bitcoin Brokers Bit4X and VenetFX

Updated with response from Bit4X below

The Financial Conduct Authority (FCA), UK’s financial regulator, issued a warning yesterday against Bit4X and VenetFX of being ‘cloned firms’ purpotrading to be authorized entities with the FCA. A Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term broker offering customers trading with the MetaTrader 4 platform, VenetFX states that its operations are part of Worth.IT Financial Services LTD, a UK FCA registered corporation. Operating out of Slovenia, VenetFX made some headlines last year as it became the first forex broker to offer the ability to fund accounts with bitcoins, under its Bit4X brand. They also launched a Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term denominated hedge fund which invests in the forex market.

Warning against VenetFX and Bit4X, the FCA announced that the brokers are in fact not affiliated with Worth.IT and are simply using the name of what had been a registered UK firm in the past, but no longer exists. Categorizing the brokers as ‘clone firms’, the FCA stated that they are part of a tactic where “Fraudsters are using the details of firms we authorize to try to convince people that they work for a genuine, authorized firm”. The tactic is specifically been emerging over the last two years, with many brokers from around the world having noted to Digital Currency Magnates parent site, Forex Magnates, that fake brokers are copying their details and pitching to clients investments as a regulated entity. Regulated brokers often find out about the clone firms after regulators contact them with complaints from customers that were duped into opening accounts with the unauthorized entity.

To many, the news isn’t surprising as VenetFX was accused of lying on its website and misleading customers as far back as 2012. When I had written about Bit4X for Forex Magnates in April 2013, among the features point was the lack of documentation needed to open accounts with users only needing an email and bitcoin address to identify themselves. (Admittedly I erred in not delving deep enough to authenticate VenetFX’s connection to Worth.IT) In relation to their authenticity and safety of funds, a Director of Bit4X answered regulatory questions in that article’s comments section. He also provided an update today about the FCA's announcement that they had tried in the past to become a licensed broker with UK and ditched the idea. He added that "ever since, we are focused on bitcoin only and work in that area with ADMD and Currenex and are not regulated". He concluded by stated that Bit4X "never scammed anyone, or else it would be in my records