CySEC Restricts FXOpen EU Shareholder's Influence

The Cyprus Securities and Exchange Commission (CySEC) recently took steps to address concerns over Aliaksandr Klimenka's indirect control of FXOpen EU Ltd, which operates FXOpen for European clients. CySEC announced that Klimenka's influence, as the ultimate shareholder, could pose risks to the sound and prudent management of the Cyprus Investment Firm (CIF). As a result, the regulator decided at a meeting held on July 29, 2024, that Klimenka's voting rights on shares in the CIF, which he holds via FXOpen Ltd, would be suspended. This suspension will become effective after a six-month grace period, allowing FXOpen to identify a new controlling shareholder.

CySEC explained that it arrived at this decision based on factors such as the severity attributed to shareholder influence under Article 11(3) of Cyprus Law L.87(I)/2017 and the potential risks posed by Klimenka's unique position as the sole indirect shareholder of FXOpen. The regulator emphasized that its primary concern is the long-term stability and ethical management of CIFs under its jurisdiction. The six-month period granted for this ownership transition, according to CySEC, is to allow the CIF to find a suitable new shareholder without jeopardizing operational continuity.

FXOpen EU Ltd, a major player in retail FX and CFDs within the EU market, has faced increased regulatory scrutiny internationally, particularly as its Australian subsidiary, FXOpen AU Pty Ltd, recently had its license revoked by the Australian Securities and Investments Commission (ASIC)​ due to multiple compliance issues. Meanwhile, Klimenka has drawn further global attention, having been indicted in the United States earlier this year on charges of money laundering and operating an unlicensed money service business. Allegedly, Klimenka was a significant figure behind BTC-e, a now-defunct digital currency exchange reportedly linked to facilitating criminal activities.