The Cyprus capital group waives its license. Reason? Changes in regulations

AJF Financial Services Ltd, an investment group based in Cyprus, which operates numerous websites primarily related to binary options and CFDs, renounced its CIF license issued by CySEC. Reason? Stricter regulations.

Better without a license?

This decision was made only 1,5 years after receiving the CySEC license (No. 295/16) issued in February 2016. The AJF Group focused primarily on the German and French markets. The sites covered by the AJF umbrella include:

• AlphaInvest.eu
• Direktbroker24.de
• CapitAlpha.com
• EU-Capitals.com
• TradeFinancial.eu
• OndaTrade.com

This is the "newest trend" among smaller Forex and Binary Options brokers to "get rid" of the license in order to continue to operate as an offshore company. By deciding to take such a step, the company does not have to comply with the strict rules introduced by CySEC (and other regulators). At the end of last year, the Cypriot supervision introduced many changes that affected the binary industry primarily - the prohibition of deposit bonuses - but also Forex - limiting the leverage or the need to guarantee protection against negative balance. Pursuant to Cypriot law, AJF and the company's brands remain under the supervision of CySEC until the settlement of obligations arising from investment services and / or activities that have ended.

Of course, the lack of regulation is associated with the lack of deposit guarantees and the "whip" in the form of government control. So, have we reached the stage where the adjustment screw has already been tightened so much that this market has become unattractive for smaller players? Will the entry into force of subsequent rules limiting the freedom of doing business also eliminate larger players and thus significantly reduce the competitiveness of brokers?

This may mean that, paradoxically, increasing the level of security for traders will ultimately become their nuisance.