Following other FX brokers’ decisions to renounce their authorisation in Cyprus, the island’s Securities and Exchange Commission today said it has withdrawn the license of Coverdeal Holdings Ltd.
The announcement is made several months after the Cypriot broker said it suspended its operations and renounced the CIF authorization.
According to the CySEC announcement and as confirmed by the firm itself, Coverdeal informed regulator by its plans back in November 2020. The brokerage requested the surrender of license solely as a company decision, while it remains unclear what was its initial reason.
Also, as CySEC manifests, Coverdeal did not arise any regulatory action, yet it appears in its records that the firm was fined €250.000 for compliance wrongdoings back in 2018. At the time, there was an investigation that has involved the assessment of the company’s compliance with a number of law provisions.
A visit to the broker’s website reveals that Coverdeal has already proceeded with changes in its website to remove any references regarding authorization and supervision of the company by CySEC. However, this has yet to be updated to reflect the final withdrawal of its CIF license.
The company has also notified clients about the new changes and clarified that it transferred funds of those who did not withdraw their balances to the investor compensation fund, which can be claimed in due course. In any case, the clients of Coverdeal are still entitled to benefit from the Investor Compensation Fund (ICF), which serves to protect the claims of covered clients and provide them with compensation in case a member could not meet its financial obligations.
Under the Cypriot regulatory framework, the company must return all outstanding balances to its clients and handle all of their complaints. In addition, Coverdeal must provide a confirmation from its external auditor that it does not have any pending obligations and must include details of each of the company’s clients, according to the same CySEC announcement.