Cyprus financial regulator CySEC has announced that at its meeting held on 29 July 2024 it decided that the influence exercised by Aliaksandr Klimenka, as sole indirect shareholder of CIF licensed company FXOpen EU Ltd is prejudicial to the sound and prudent management of the CIF.
FXOpen EU Ltd operates the FXOpen Retail FX and CFDs brokerage brand (website fxopen.com) for EU based clients.
This is the second run-in that the FXOpen brand has had with global regulators recently. We had reported in early September that Australia regulator ASIC cancelled the Australian financial services (AFS) license of the group’s Australia subsidiary FXOpen AU Pty Ltd, citing a number of violations.
While CySEC did not make reference to it in its release on the matter, Aliaksandr Klimenka was indicted earlier this year in the US with charges of money laundering conspiracy and operation of an unlicensed money services business. According to the US Justice Department, Mr. Klimenka allegedly controlled BTC-e, a digital currency exchange, with Alexander Vinnik and others. BTC-e allegedly facilitated transactions for cybercriminals worldwide and received criminal proceeds from numerous computer intrusions and hacking incidents, ransomware scams, identity theft schemes, corrupt public officials, and narcotics distribution rings, and allegedly was used to facilitate crimes ranging from computer hacking to fraud, identity theft, tax refund fraud schemes, public corruption, and drug trafficking.
But back to Cyprus, CySEC said that it decided the suspension of the exercise of the voting rights attached to the shares of the CIF, held by Aliaksandr Klimenka, through the company FXOpen Ltd (the sole direct shareholder of the CIF), shall come into force after six months, in order to end that situation.
For the determination of the type of measures it took, CySEC said it took into account:
i. The severity attributed by the legislator, as provided in article 11(3) of the L.87(I)/2017, to the influence of shareholders and to the possibility that it may be prejudicial to the sound and prudent management of a CIF, which is reflected in the type of measures provided for in the same article.
ii. The particular circumstances of the CIF, and specifically that Mr. Αliaksandr Klimenka is the sole ultimate shareholder.
iii. That the particular measure is considered, under the circumstances, appropriate to end Mr. Klimenka’s influence on the management of the CIF, since the suspension of voting rights, ensures his non-participation in decision-making at a general meeting of the CIF’s shareholders, which is the body for handling all of CIF’s matters.
For the determination of the deadline of six months for the above measure to enter into force, CySEC said it took into account the need to provide time (i.e. six months), before the implementation of the measure, in order for the CIF to proceed with finding solutions during the said period.
