Freedom Finance Europe has paid €50,000 to the Cypriot securities watchdog to settle ‘potential’ non-compliance with the country’s laws on anti-money laundering (AML). The firm is the online brokerage subsidiary of the US-based investment conglomerate, Freedom Holding Corp.

Freedom Finance Europe Settles with CySEC

The Cyprus Securities and Exchange Commission (CySEC) announced the settlement payment today (Thursday), noting that its Board made the decision last month. The regulator said the settlement stems from its scrutiny of Freedom Finance Europe’s compliance with provisions on customer identification and due diligence on clients before and during a business relationship.

In addition, CySEC probed the online broker’s compliance with the rules on establishing ‘adequate and appropriate’ policies, controls and procedures to monitor client transactions likely to be associated with money laundering or terrorist financing activities. The provision also dictates monitoring “complex or unusually large transactions and all other unusual patterns of transactions which have no apparent economic or visible lawful purpose,” CySEC explained.

Freedom Finance Europe Seeks Growth

According to CySEC’s register, Freedom Finance Europe operates under the trading names Freedom Finance, Freedom Broker and Freedom 24. The brokerage operates a network of 15 sites through which it offers stocks, exchange-traded funds, futures and options trading opportunities to clients across Europe.

"The settlement is associated with minor omissions in the company's procedures within a two-year period between 2017 and 2019. All the points indicated by the regulator have been resolved back then," Freedom Finance Europe told Finance Magnates via email. "We are glad to have a mutual settlement and continue to adhere to the highest industry compliance standards to ensure our clients and partners have the best possible investment experience."

The settlement with CySEC comes as Freedom Finance Europe seeks to grow its business and industry presence. On Thursday, the broker signed an exclusive partnership agreement with FC Krasava, a Russian football club that moved its base to Cyprus due to Russia’s ongoing war with Ukraine.

Recently, the online broker introduced long-term investment plans for its clients, offering interest rates of up to 5.8% per annum in US dollars and up to 3.6% per annum in euros. The firm said that the rates “are much higher than the savings account returns currently offered by most European banks and brokerages.”

On the other hand, the settlement represents CySEC’s latest action against Cyprus Investment Firms (CIFs) erring. Finance Magnates reported on Wednesday that the institutional broker, BCS Cyprus, paid €100,000 to the regulator to settle the company’s ‘possible violations’ of Cyprus and the European Union’s financial market rules. The measure followed the watchdog’s investigation into BCS’ compliance with the rules between 2019 and 2021.

Recently, CySEC reached a settlement of €100,000 with forex and contracts for difference broker, BCM Begin Capital Markets. In addition, the watchdog has withdrawn at least five CIF licenses since the start of the year, as part of its supervisory duty.