The Cyprus regulator cites governance failures and client protection risks. The suspension comes amid criminal proceedings against the firm's senior executives in Russia.
CySEC has suspended the licence of Mind Money Limited, a Cyprus broker formerly operating as Zerich Securities Ltd. The regulator ordered the firm to cease all investment activities immediately and return client funds on demand.
Russian Arrests Put Mind Money in the Spotlight
Less than two weeks prior, Russia's Federal Security Service (FSB) announced the arrest of senior executives at Mind Money and their associates on charges of large-scale fraud.
According to the FSB, the suspects allegedly exploited a scheme involving frozen American Depositary Receipts, using forged documents to exchange blocked securities for shares in Russian public companies, causing damages estimated at over 7 billion rubles (nearly $100 million).
Searches at residential addresses and offices in Moscow and St. Petersburg yielded communications equipment, corporate seals, digital media containing crypto wallets, and over 100 million rubles in cash.
- CySEC Chairman Backs EU Supervision Push, Wants a "Level Playing Field"
- Spain Treats Spot-Quoted and Perpetual Futures as CFDs in Notice to Cyprus Brokers
- “We Are Not Here To Provide Jobs”: CySEC Chair on Crypto Perps, Prediction Markets and the High-Wire Act of EU Regulation
The company had previously acknowledged the situation in a statement following the arrests, confirming that its CEO is subject to procedural actions as part of an investigation in Russia.
"We proceed from the principle of presumption of innocence and consider it inappropriate to assess the circumstances of the case before the investigative procedures are completed," the company said, adding that the situation "should not be interpreted as an assessment of the work of Mind Money as a whole."
CySEC Cites Governance Failures
CySEC's decision makes no reference to the Russian proceedings. Instead, the regulator cites four specific governance violations: conducting activities outside the scope of its authorisation, failing to notify CySEC of board changes, operating without the minimum required two effective directors, and concerns over the suitability of its shareholder.
Mind Money has one month to remediate the breaches. While the suspension remains in force, it may neither onboard new clients nor execute new business transactions.
Mind Money has since responded to the licence suspension as well, attributing some of the cited violations to "recent corporate changes, including a change of CEO and changes in shareholder structure," and saying it is already working to meet the regulator's requirements.
The firm added that it continues to service existing clients within the permitted scope — processing withdrawal requests, executing pending orders, and returning financial instruments.
