The Spanish authorities have issued a cautionary signal to traders regarding FX Trading Corporation after suspicions arose that it was facilitating trading for Spanish clients without proper registration.
A Country Takes Necessary Action
Spain’s financial regulator, Commision Nacional del Mercado de Valores (CNMV), similar to the SEC in the U.S., has leveled accusations against the company. The company is being flagged for allegedly offering financial services that don’t comply with legal requirements. This alleged violation of Article 17 of Spain’s Securities Markets Law has led CNMV to place the entity on a cautionary list.
Cryptocurrency laws in Spain are not well-defined, limiting the regulation to a basic understanding of what virtual assets mean within anti-money laundering (AML) It's clear that crypto firms can't bypass responsibilities, even in jurisdictions without solid guidelines. Globally, these companies must adhere to expected standards.
We’re Seeing This Everywhere
Situations like these often mirror scenarios in the U.S., where the SEC recently attracted attention for imposing penalties on AirFox and Paragon Coin companies that neglected to correctly register their initial coin offerings (ICOs) as securities. Each company faced a $250,000 fine, even as their leadership expressed relief at resuming regular activities.
Even smaller regulatory bodies are stepping up to enforce legal standards. The Texas State Securities Board recently issued a issued a cease-and-desist directive to My Crypto Mine and its CEO, Mark Steven Royer, from Del Mar, California. This came after he assured clients of guaranteed monthly returns ranging from ten to 20 percent.
The board pointed out that Royer's assertions on the company’s website and social channels are deceptive, posing potentially irreversible harm to investors. Regulators are demanding a halt to these claims pending a thorough inquiry.
Following Big Brother’s Lead
In its move to curb illicit crypto operations, CNMV is taking a page from other top European regulators. Over the last two years, CNMV has consistently advised customers on trading risks and costs and has been setting new standards for advertising in the crypto space. that offer forex , contracts for difference (CFDs) and binary options for Spain-based retail investors.
CNMV also requires forex brokers, asserting high leverage over ten to one, to make their clients aware of the risks and complexities involved, particularly warning that such products may not suit retail investors. Companies should also explain the substantial costs of closing trades prematurely.
Europe Is Taking No Chances
Regulatory processes aren't confined to individual countries; they're becoming a pan-European effort. Major EU entities like the European Securities and Markets Authority (ESMA) provide guidelines on ICOs and other crypto activities, highlighting that while cryptocurrencies may not individually disrupt financial stability, activities like ICOs carry a different weight.
In official commentary, ESMA remarks that tighter regulation of cryptocurrencies can entail consequences, such as inadvertently legitimizing and popularizing crypto, yet recognizes only a fraction of crypto ventures qualify as MiFID financial instruments.
Nick Marinoff is a seasoned cryptocurrency journalist since 2014 with roles as lead content writer at Money & Tech and a senior position at Bitcoinist and News BTC.
