Russian Central Bank Flags 812 Illegal FX Brokers in 2021

The Central Bank of Russia said on Wednesday that it has busted as many as 812 foreign exchange (forex) dealers in 2021 that were operating in the country illegally. These online trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term platforms positioned themselves as forex brokers and were trying to onboard Russian clients.

The action against these 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 platforms came in as a part of a wider crackdown against illegal financial companies. Overall, the central bank identified 2,679 illegal platforms. Among them, 871 were pyramid schemes, 860 impersonated themselves as professional participants in the securities market and the remaining 948 companies were illegal creditors. In 2020, the market supervisor flagged only 222 pyramid schemes and 395 illegal securities market dealers.

From the numbers, it was clear that the illegal activities in the financial markets last year jumped significantly.

A Tight Market

Forex brokers in Russia need to obtain a license from the central bank to operate in the country. However, the locally-regulated market is very small as there are only four Russia-licensed forex dealers: BCS-Forex, VTB Forex, Alfa-Forex, and FINAM Forex.

Though several internationally regulated reputed brokerage companies are targeting Russian traders, the local regulator seems to be turning vigilant towards non-local entities. Last year, the central bank published a long list of blacklisted companies that contained the names of 1,820 financial services companies, including some of the well-established international forex brokers.

“We recommend that people be more attentive, analyze and evaluate all financial proposals, especially those related to investments. Investing always involves risk. Therefore, it is necessary to use the services of only real professionals licensed by the Bank of Russia,” Valery Lyakh, the Director at the Bank of Russia’s Department for Combating Unfair Practices, said (translated from Russian).