CySEC Issues Advisory against Investments in XECoin, Cracks down on Forex Platforms

Cryptocurrencies are a dime a dozen. The evolution of cryptocurrencies started with Bitcoin and thanks to its open source nature; many people ended up creating their own versions of altcoins. While few significant ones solve real issues, many cryptocurrencies are created just to make a quick buck. Given the volatile nature of cryptocurrencies and the lack of trust in many altcoins, government agencies across the world have regularly urged caution while dealing with them.

Now, it is Cyprus’ turn to issue such an advisory against the use of cryptocurrencies, especially XECOIN. The CySEC’s announcement reads,

“Cyprus Securities and Exchange Commission (“CySEC”) would like to inform the investing public about the XECOIN or cryptocoin that according to information is available in Cyprus.

XECOIN or cryptocoin is not a financial instrument. Therefore, it does not fall within the scope of the Investment Services and Activities and Regulated Markets Laws of 2007 to 2016, nor is supervised by CySEC.

Furthermore, CySEC would like to inform the investing public that currently there are no specific regulations for the protection of persons transacting in XECOIN or cryptocoin or other virtual currencies.

CySEC urges the investing public to exercise extreme caution in products promising high returns. It is important that the investing public is informed, before accepting such offers, about the risks associated with them, including possible loss of money.”

On the other hand, CySEC has cracked down on many forex and binary options trading platform operators who had received their licenses from the country’s authorities. The affected players are said to have violated the compliance requirements involving the actual availability of funds and capital adequacy ratios as set by licensing terms.

According to reports, the Cyprus Investment Firm license of players like Leadtrade Ltd, Gametech (Cyprus) Ltd, Dragon Options Ltd, and TTCM Traders Trust Capital Markets Ltd stands canceled. These companies responsible for operating multiple online trading platforms are given a timeframe of 10 days to rectify all the breaches.

Many online forex and binary options trading platforms are known to offer Bitcoin/fiat currency trading pairs. The tightening regulations are part of the proposals for changes issued by CySEC earlier in February 2017.

Ref: CySEC | Finance Feeds | Image: Shutterstock