The Financial Conduct Authority (FCA) has released the name of yet another unregulated broker operating in the UK. The British regulator announced this Friday that it believes XtraderFX is offerings its services, illicitly, to customers within the UK.
The unregulated retail trading industry has come under intense pressure over the past couple of years. Payments processors are cracking down on the firms by refusing them their services and bans on binary options dealing has also forced many brokers to shut down.
Regulators have played a role in this crackdown by continually issuing warnings against these unregulated firms. The FCA has been particularly active on this front, and it issues statements on a near-daily basis against brokers attempting to sell their products in the UK without the regulator’s approval.
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Today’s release means XtraderFX appears to have fallen into the FCA’s sights but, as is typical of most unregulated brokers, it doesn’t offer FX or contracts-for-differences (CFDs) trading. Instead, it has focused its efforts on cryptocurrency trading.
The firm’s website lists its products as Bitcoin, Ethereum, and Litecoin. It also lists “Swap” as a product but does not list any products under this section. Presumably, this means it offers some sort of cryptocurrency swap service.
XtraderFX claims that it has an address in the UK, but it is unclear as to whether it really has a physical presence there. Many unregulated brokers set up fake offices in the country, usually in London, but actually, operate from a completely different jurisdiction.
The move to cryptocurrency trading may simply be an effort to shift into a market that operates within something of a legal grey area. Unlike FX or CFD trading, which is heavily regulated, the cryptocurrency market has substantially fewer restrictions on it.