Here is an article which appeared in [I]Finance Magnates[/I] just yesterday —
Exclusive: IronFX Withdrawal Delays – a Story of a $176m Client Money Hole
Form your own opinion on the facts of this matter, before you read my opinion.
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Here’s my take on the IronFX scandal:
[I]IronFX has been under investigation[/I] by CySEC, the financial regulator in Cyprus, [I]for a couple of years.[/I]
The problem seems to be that B[/B] IronFX has a large presence in Cyprus, B[/B] CySEC is a relatively weak regulator, leery of creating a financial crisis in Cyprus by crippling a [I]too-big-to-fail[/I] broker, and B[/B] IronFX has been successful in deflecting the regulator’s attempt to obtain legitimate audit information.
The problems at IronFX seem to stem from their aggressive bonus program, which had some tricky provisions embedded in the fine print. Customers who hadn’t paid sufficient attention to the fine print were not able to withdraw bonus money they thought they were entitled to, and they claimed fraud. IronFX took the position that those customers failed to comply with the fine print in the bonus program, and therefore had no grounds for complaint or legal action against the broker. And IronFX has — until recently — effectively stone-walled CySEC, the Cyprus regulator.
In my opinion, deposit bonuses — with or without sneaky fine print — are a pretty shabby marketing tactic. Brokers who resort to bonuses to attract new customers are just asking for trouble in the form of disgruntled customers, bad reviews, complaints to regulators, and lawsuits.
But, a lot of brokers use bonuses as a “hook”, and will probably continue to do so, unless and until regulators put a stop to them.
Your thoughts?
Edit 12/29/2016 – Here is the IronFX response to the CySEC audit
(which is detailed in the [I]Finance Magnates[/I] link at the top of this post) —
Exclusive: IronFX Responds to CySEC Audit Revelations
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