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As the whirlpool around troubled FX broker FOREX MMCIS gathers pace and the withdrawal maladies continue, Russia’s top consumer affairs body has admitted it is helpless to take any measures against the company.
LeapRate has been keeping you up to date with the latest developments around FOREX MMCIS, a troubled broker particularly active in Russia and the CIS countries. Earlier this week the broker halted processing of all withdrawal requests, saying it was out of money because of the illegal actions of electronic payments company DengiOnline. And while the former partners sort out their relationship and business ties, thousands of traders cannot access their funds.
Estimates by CRFIN, Russia’s Forex self-regulatory organization, show that the number of victims of the technically bankrupt broker are 50,000 Russian traders. The organization has addressed Russia’s Central Bank with regards to what can be done to solve the problems of the investors. However, the country’s top watchdog just stated its lack of power to take any action against FOREX MMCIS given the absence of a law regulating the Forex industry in Russia.
News agency RBC received a more detailed reply from the Central Bank on the matter:
“The Forex market in Russia is not regulated at this point. The Central Bank service for the protection of the rights of consumers and minor shareholders receives complaints regarding the activities of Forex companies, including complaints concerning withdrawal problems. Once a law is in place, Russia’s Central Bank will be able to take measures to protect the customers of such services.”
Russia’s lawmakers have shown reluctance towards the Forex bill, which has been awaiting its second reading at the Duma (the lower chamber of the Russian parliament) since the summer of 2013. The second reading has been rescheduled numerous times for various reasons, leaving the Forex industry in one of the biggest jurisdictions in the world in limbo.
FOREX MMCIS currently features in the blacklist which CRFIN maintains, which has warned previously about the suspicious activity of the FX broker. The troubled company is formally registered in St Vincent & Grenadines, with the single “license” it has in Russia provided by CROFR, a non-profit group of brokers and dealers. The latter certificate is set to expire tomorrow, November 1st.
Meanwhile, Russia’s FX market has become an increasingly difficult environment, and companies have been devouring each other, appearing and disappearing with the clients’ funds. An example of the latter is ForexInn that earlier this month decided to shut down its operations, with another example being Royal Max Broker, which back in the days offered guidance by psychics and magicians on top of trading services.