CySEC Warning List Helps to Put Fraudsters Out of Action

75 percent of the sites on the regulator's non-approved domain list have shut down

Last week, the Cyprus Securities and Exchange Commission (CySEC), a Cypriot regulator, made a number of new additions to its list of non-approved domains.

Helping investors distinguish scammers from legitimate firms, the list is comprised of over 100 companies that – despite any claims to the contrary – don’t have regulatory approval from CySEC.

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Being the curious folks that we are here at Finance Magnates, we decided to have a look at each website on the list to gauge how effective the regulator’s warnings have been.

Of course, it’s impossible to draw a direct line between the list and a site closing down but such warnings, when issued by regulators, undoubtedly catalyze the process.

As of this Thursday, 106 of the 139 domains – 76 percent – listed on CySEC’s warning list are non-functioning.

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Two of the domains listed on the site should probably be removed by the regulator. One of them appears to be a Muslim Brotherhood-style charity based in Afghanistan which, if it was a broker, has performed an impressive feat of re-branding. The other – less interestingly – sells sneakers.

Worryingly for the regulator, five of the firms are not just functioning, but they claim to have offices in Cyprus itself. Without even having a license from CySEC, many of these companies seem to be proving illegal services with registered offices on the Mediterranean island.

The bulk of illicit firms on the list that are still operational, however, are registered in the traditional offshore havens – the Marshall Islands, Vanuatu, and St Vincent and the Grenadines.

How much can the regulator do to actively stop these companies from operating? If past experience is anything to go by, then, sadly, the answer is not much.

Nonetheless, given that the bulk of the firms on the list have ceased operations, the passive approach of simply warning members of the public against using their services seems to be working reasonably well.

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