Making sure no US residents are accepted as clients is one of the top priorities of any offshore broker who wants to remain in business. Now we are given another example of this, as the U.S. Commodity Futures Trading Commission (CFTC) is again going after a broker for having American traders.
The CFTC has filed a lawsuit against Tallinex for allegedly accepting US clients without being licensed to do so. According to the allegations, the broker collected over $1.5 million in deposits from US-based FX traders between September 2012 and at least September 2016.
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According to its website, Tallinex operates in the jurisdiction of St Vincent and the Grenadines. It promises a true ECN/STP brokerage with a PrimeXM FX bridge to Integral’s FX Grid system. Tallinex provides the MetaTrader 4 (MT4) platform in 32 languages including English, Swedish, Russian, Finnish and Estonian.
Importantly it also warns: “Tallinex does not operate within the United States of America or Canada, nor does it solicit residents of those countries, nor of Puerto Rico, Guam, American Samoa, Northern Mariana Islands, Virgin Islands (US), United States Minor Outlying Islands, Finland, Estonia or St Vincent and The Grenadines in relation to the provision of retail Forex services.”
As we can see, this warning was not enough to protect the firm from the long arm of American law. Actively searching for US ties among new leads wishing to trade with your brokerage and banning them is a necessity if you want to be safe.