CySEC Withdraws CIF Authorization from Leverate

by Tareq Sikder
  • The absence of judicial review indicates finality in CySEC's decision.
  • Earlier, the regulator withdrew CIF authorizations for four investment firms.
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In a regulatory decision, the Cyprus Securities and Exchange Commission (CySEC) has announced the withdrawal of Cyprus Investment Firm (CIF) authorization from Leverate Financial Services Ltd. The decision, made during CySEC's meeting on December 4, 2023, followed the company's explicit renunciation of its authorization.

CySEC Response to Renounced Authorization

The recent decision by the company to voluntarily renounce its authorization has prompted CySEC to take action in accordance with relevant provisions of the Investment Services and Activities and Regulated Markets Law.

The withdrawal of CIF authorization effectively bars Leverate Financial Services Ltd from continuing its operations within the regulatory framework overseen by CySEC. The announcement does not cite any judicial review associated with the decision, indicating that the withdrawal of authorization stands as final, pending any future legal developments.

Leverate, established in 2008, has evolved into a technology and services provider within the brokerage industry. It has expanded globally and currently employs 150 individuals, compared to its initial 4-person team. The company offers dedicated account managers, positioning itself as a notable player in the Forex brokerage sector.

Back in October, Brad Alexander at Leverate opined that Limassol, Cyprus has been a major center for retail FX/CFD Brokers for many years. Many multi-asset brokers feel that the CySEC license is more favourable to them as they have access to the entire European market.

The license may not carry the prestige of the UK’s FCA license, but it is considered to be in a higher category than most offshore jurisdictions. One advantage that the CySEC License brings to the table over the FCA license is the ability to offer Cryptocurrency CFDs to its clientele, at extra cost in the application stage. Trading of Crypto CFDs is not allowed under the FCA.

CySEC Revokes CIF for Four Firms and ICF Withdraws Membership

Earlier, CySEC announced the withdrawal of CIF authorizations for four Cyprus-based investment firms: Stone Edge Capital Ltd, Holiway Investments Ltd, FXBFI Broker Financial Invest Ltd, and KAB Strategy Ltd, as reported by Finance Magnates. Additionally, the Investors Compensation Fund (ICF) revoked the membership of these firms.

The ICF's decision to revoke membership followed CySEC's withdrawal of CIF authorizations for the aforementioned firms. Despite this, covered clients of these firms are still eligible to file compensation claims for investment operations conducted before the membership withdrawal, provided they meet CySEC's eligibility criteria.

ΑΠΟΦΑΣΗ ΕΚΚ για την ανάκληση της άδειας λειτουργίας ΚΕΠΕΥ της εταιρείας Leverate Financial Services Ltd

CySEC Decision for the withdrawal of the CIF licence of Leverate Financial Services Ltdhttps://t.co/AJ8JnU3E8g

— CySEC (@CySEC_official) February 8, 2024

CySEC's investigations revealed violations of CIF authorization terms by Stone Edge Capital and Holiway Investments. Stone Edge Capital was found non-compliant with organizational standards and lacked sufficient anti-money laundering (AML) systems. Holiway Investments also faced compliance issues.

In the case of FXBFI Broker Financial Invest, inadequate AML/CTF policies led to a €50,000 penalty. KAB Strategy voluntarily renounced its license. CySEC's actions underline the importance of regulatory compliance and investor protection within Cyprus' financial landscape.

In a regulatory decision, the Cyprus Securities and Exchange Commission (CySEC) has announced the withdrawal of Cyprus Investment Firm (CIF) authorization from Leverate Financial Services Ltd. The decision, made during CySEC's meeting on December 4, 2023, followed the company's explicit renunciation of its authorization.

CySEC Response to Renounced Authorization

The recent decision by the company to voluntarily renounce its authorization has prompted CySEC to take action in accordance with relevant provisions of the Investment Services and Activities and Regulated Markets Law.

The withdrawal of CIF authorization effectively bars Leverate Financial Services Ltd from continuing its operations within the regulatory framework overseen by CySEC. The announcement does not cite any judicial review associated with the decision, indicating that the withdrawal of authorization stands as final, pending any future legal developments.

Leverate, established in 2008, has evolved into a technology and services provider within the brokerage industry. It has expanded globally and currently employs 150 individuals, compared to its initial 4-person team. The company offers dedicated account managers, positioning itself as a notable player in the Forex brokerage sector.

Back in October, Brad Alexander at Leverate opined that Limassol, Cyprus has been a major center for retail FX/CFD Brokers for many years. Many multi-asset brokers feel that the CySEC license is more favourable to them as they have access to the entire European market.

The license may not carry the prestige of the UK’s FCA license, but it is considered to be in a higher category than most offshore jurisdictions. One advantage that the CySEC License brings to the table over the FCA license is the ability to offer Cryptocurrency CFDs to its clientele, at extra cost in the application stage. Trading of Crypto CFDs is not allowed under the FCA.

CySEC Revokes CIF for Four Firms and ICF Withdraws Membership

Earlier, CySEC announced the withdrawal of CIF authorizations for four Cyprus-based investment firms: Stone Edge Capital Ltd, Holiway Investments Ltd, FXBFI Broker Financial Invest Ltd, and KAB Strategy Ltd, as reported by Finance Magnates. Additionally, the Investors Compensation Fund (ICF) revoked the membership of these firms.

The ICF's decision to revoke membership followed CySEC's withdrawal of CIF authorizations for the aforementioned firms. Despite this, covered clients of these firms are still eligible to file compensation claims for investment operations conducted before the membership withdrawal, provided they meet CySEC's eligibility criteria.

ΑΠΟΦΑΣΗ ΕΚΚ για την ανάκληση της άδειας λειτουργίας ΚΕΠΕΥ της εταιρείας Leverate Financial Services Ltd

CySEC Decision for the withdrawal of the CIF licence of Leverate Financial Services Ltdhttps://t.co/AJ8JnU3E8g

— CySEC (@CySEC_official) February 8, 2024

CySEC's investigations revealed violations of CIF authorization terms by Stone Edge Capital and Holiway Investments. Stone Edge Capital was found non-compliant with organizational standards and lacked sufficient anti-money laundering (AML) systems. Holiway Investments also faced compliance issues.

In the case of FXBFI Broker Financial Invest, inadequate AML/CTF policies led to a €50,000 penalty. KAB Strategy voluntarily renounced its license. CySEC's actions underline the importance of regulatory compliance and investor protection within Cyprus' financial landscape.

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