BVI FSC Denies 4XP’s Claims it Has Frozen Company Accounts: The Full Story

Last month, it was posted that 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 Place Ltd (4XP) was the target of an investor warning by CySec, with its future in doubt. Since then, the broker has shut its doors to processing client withdrawals and deposits, ‘claiming’ it received a ‘cease and desist’ order from the BVI Financial Services Commission (FSC).

The letter to clients though, occurred after it was revealed to Forex Magnates that the broker was in the midst of internal changes, and would no longer be contracting Forex Broker Forex Broker In the forex space, a broker is any company that can provide traders with access to a platform that permits the buying and selling of multiple currencies.The retail forex industry has grown over the past two decades to include every major jurisdiction, which in turn has necessitated new regulatory oversight. Relative to the institutional sector, retail brokers are rather small portion of the greater forex market. However, traders can rely on brokers for leveraged trading in a 24-hour-a-day marke In the forex space, a broker is any company that can provide traders with access to a platform that permits the buying and selling of multiple currencies.The retail forex industry has grown over the past two decades to include every major jurisdiction, which in turn has necessitated new regulatory oversight. Relative to the institutional sector, retail brokers are rather small portion of the greater forex market. However, traders can rely on brokers for leveraged trading in a 24-hour-a-day marke Read this Term outsourcing firm, FXSales. As a result, many employees of FXSales itself were let go in the middle of October.

FXSales, which provided sales, support and marketing services for the 4XP brand and its customers, is one of many third party broker servicing firms in the industry. The use of third party sales and marketing firms is prevalent among many brokers who are officially domiciled in tax-friendly countries.

The model allows firms to retain support staff in locales where it is easier to source suitable sales and marketing employees, while keeping official broker profits reported elsewhere. Although technically different companies, the broker and third party firm are nearly always closely connected operationally. Commenting about the changes, a senior FXSales executive told Forex Magnates that 4XP will continue to exist, but wouldn’t provide comment on who will provide client services. However, despite the claims from FXSales' executive, 4XP as a brand appears to be shutting down.

BVI FSC Rejects 4XP Claims

After the exit of FXSales, calls from Forex Magnates to the broker were unanswered, with clients also claiming on various forums that they were unable to reach 4XP representatives. Following the quiet period, 4XP sent a letter to clients that stated, “The Company has received an immediate and surprising cease order, issued by the British Virgins Islands FSC, ordering the Company to cease its trading services operation. The Company has applied to the FSC against the order, and is considering other legal venues to renew its operations.” The letter goes on to explain that, “Due to the above, the Company is currently unable to process deposit and withdrawal requests, until further notice. The Company hopes such notice shall not take long.”

Following up on the matter, Forex Magnates reached out to the BVI FSC in regards to 4XP’s claims and whether they were even regulated by the FSC, as their name doesn’t appear in regulator’s list of licensed firms. Responding, the FSC referred us to their public statement about 4XP.

According to the regulator, 4XP was never licensed by the FSC and they did in fact serve 4XP a cease and desist letter, but this occurred in June, thus not so ‘surprising’ as 4XP had claimed in October. The FSC statement also clarifies that the regulator hadn't applied any actions to prevent client withdrawals, as they said, "However, the FSC has not issued any order or taken any action to prevent Forex Place Ltd. also operating as 4XP at www.4xp.com from returning any monies that has been placed with it.”

* Assisted in bringing to print: Ron Finberg