Iron FX, a Cyprus headquartered forex broker that was previously hailed as a huge success story and had raised many eyebrows in the industry due to several moves it had made, such as for example its sponsorship deal with Barcelona FC , has been the centre of much attention and negative publicity in the previous few months.
It all began with allegations about the company’s Chinese clients and IBs, with the broker claiming that it had fallen victim of abusive and manipulative trading practices, while clients maintained that they were scammed and their withdrawals were being refused. Ever since rumours kept spreading, while an increasing number of clients from across the globe say that they have been wronged and that Iron FX is withholding their funds for no reason.
Campaigns against the firm were launched over the internet, in the media as well as the social media, with unhappy customers creating special Facebook pages on the issue. The main thread of argument is that IronFX is in fact bankrupt and insolvent and that the reason it is not paying out clients is because it can’t and also that it is using the money of account holders in order to pay salaries and cover other operational expenses. Moreover, it is claimed that the “abusive traders” story is a mere smoke screen. Unhappy clients and other industry stakeholders have also turned their criticism against CySEC, the financial industry regulator in the jurisdiction of Cyprus, saying that it is punishing other firms, such as CommexFX but turns a blind eye when it comes to IronFX. Some have even suggested that the fact that the current President of Cyprus is the godfather of IronFX’s CEO, has something to do with the leniency with which IronFX is being treated by authorities.
Against this convoluted background, the cat appears to be finally out of the box, through an announcement issued by CySEC on 6th August, which reads as follows:
“As a consequence of media reports and the increasing number of complaints submitted by investors against the Cyprus Investment Firm IronFX Global Ltd (the “CIF”), the Cyprus Securities and Exchange Commission (the “CySEC”) wishes to clarify that there is an ongoing investigation against the CIF with respect to possible infringements of the Legislation. Upon completion of the investigation, the CySEC will publish its findings and/or will proceed with further announcements in the meantime, if deemed necessary. The CySEC examines the complaints submitted to it by investors, against any supervised entity, in the context of its statutory mandate. For complaints against Cyprus Investment Firms that relate to possible compensation claims, the investors are encouraged to contact the Financial Ombudsman, which is the competent body to examine compensation claims via an extrajudicial procedure, at [email protected]”
What can be inferred from this statement is that most probably there cannot be smoke without a fire, however, IronFX interprets the move by the regulator differently and is sticking to its version of the story. Their reaction to CySEC’s announcement was this:
“The CySEC announcement is a standard announcement relating to our internal investigation of the abusive trading by clients in breach of our terms and conditions. We welcome the investigation that will prove there is no wrongdoing on behalf of the company and will put an end to the defamatory claims being made against the company. We have been working closely with CySEC to assist them and to date we have received no indications of wrongdoing. We have obtained several legal opinion and expert opinions supporting our actions to date.”
However, it is a fact that IronFX is faced with several court cases and a huge number of pending withdrawals. Although saddening, it appears that this saga will not have a happy ending. Here at binaryoptionswire.com we would be interested to hear about any personal story or insight you may have on this case so please feel free to leave a comment or email us. In the meantime, if you do have a complaint against IronFX and want to seek compensation, then do follow CySEC’s advice and contact the Financial Ombudsman of the Republic of Cyprus immediately.
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.