FXOpen EU Given Six Months By CySEC To Restructure Amid Voting Freeze
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The Cyprus Securities and Exchange Commission (CySEC) has decided to put a hold on the voting rights of FXOpen’s sole shareholder, Aliaksandr Klimenka. CySEC is worried that its control over the company might be too strong and could affect its management. CySEC said this is a management problem that FXOpen EU Ltd must fix within the next six months.
Back in July, CySEC found that Klimenka, as the only indirect owner of FXOpen EU Ltd, could have too much influence over how the company is run.
FXOpen May Need To Change Ownership To Reduce Klimenka’s Control
According to CySEC, the hold on Klimenka’s voting rights, which he has through FXOpen Ltd, will start after six months. This gives FXOpen EU Ltd time to make the needed changes.
CySEC explained that this period will let FXOpen EU Ltd make important adjustments. These changes could mean changing ownership or making new rules inside the company to reduce Klimenka’s control.
Earlier this year, Klimenka faced charges for money laundering and running an unlicensed money service business. These charges are tied to BTC-e, a digital currency exchange linked to illegal activities.
The U.S. Department of Justice shared that these charges cover 2011 to 2017 and involve online money laundering and cybercrimes. Per reports, Klimenka and others controlled BTC-e, which allowed users to trade Bitcoin without proper checks and anti-money-laundering rules.
CySEC is the main financial watchdog in Cyprus. It helps keep brokers safe across Europe and follows special rules set by Europe called MiFID rules.
The regulator also watches over the Cyprus Stock Exchange and keeps an eye on licensed investment firms and consultants, making sure they follow important rules. One of CySEC’s big jobs is to give licenses to companies, like investment firms and brokers, so they can work in Cyprus and other countries.
CySEC Imposes Penalties On Firms That Violate Financial Rules
If brokers or consultants break the rules, CySEC can give them penalties. By doing this, CySEC wants to make sure financial activities stay safe and under control.
The agency also checks on other groups, like Licensed Investment Services Companies, Collective Investment funds, investment consultants, and managers of mutual funds. Its main job is to make sure these firms have the licenses they need to operate safely, keeping everything in order across the region.
CySEC was established in 2001 under section 5 of the Cyprus Securities and Exchange Commission (Establishment and Responsibilities) Law of 2001 as a public corporate body.
When Cyprus joined the European Union in 2004, CySEC also became part of the European MiFID regulation, allowing firms registered in Cyprus to access all European markets.
However, joining the EU and adopting the Euro brought major changes to the financial regulatory framework CySEC managed, transforming what had previously been considered a tax haven.