Does FXOpen open accounts for non-US companies owned by the US residents?
Bravehostamps! Are you still having good luck with finfx? I am thinking about them, I manual trade, only.
Yep, theyâre quite OK.
âIf you clear your name howeverâŚâ
Realistically speaking, thereâs nothing clouded about his name. Bureaucratically speaking, there is an action against him in a foreign jurisdiction. Of course BHS was aiming at an analogy, but letâs sharpen it and see what the lens shows.
I am the big fat surprisingly well-funded and apparently rapacious CFTC. I stroll over to FXOpenâs nearest office â perhaps in Cyprus or Mauritius or Hong Kong, perhaps by jet or simply a nice fancy email â and I say, âWe can do this the easy way, or we can do it the hard way. Here are courtesy copies of the papers weâre about to file in your locality, charging you with XYZ which as unbelievable as it might seem we can easily push through the court and get a permanent injunction on you doing any business including but not limited to even taking a piss anywhere on this green Earth. Why? Because we can. Thatâs why.â
Whatâs the easy way? âEverything is copacetic if you simply limit your clientele to those we deem acceptable, not to include U.S. residents. For now. Maybe others in future. But nothing onerous. Thatâs it. Yes?â YES! âGreat, itâs been a pleasure doing business with you, have a nice day.â
Yes?
No, because the directors of the company would need to provide ID which would show them as US residents
Alas there are layers upon layers of influence working upon every level of middleman in this grand black old make-money-the-arbiter-of-value scheme.
Otherwise we might seriously ponder that hackneyed movie script above.
BHS, thatâs what nominee directors are for. See my post above on Forex-Metal. {shrugs}
We have nothing in those countries. As the crow flies, that would be either Cairo, Auckland or Sydney 
Letâs just say that when FXOpen AU Pty Ltd was applying for an AFSL, there were questions about the long and colourful history of FXOpenâs offshore operation and this naturally included questions about the CFTC action.
Well if you have non US resident nominee directors, you could get away with it I guess. Until they tried to withdraw money to the US that is. Speaking hypothetically of course.
Canât imagine any hypothetical organisation making the mistake of funding from the requisite offshore-to-U.S. bank then making a w/d straight into the U.S. Might happen perhaps, but seems an odd idea.
To âget away withâ something implies wrongdoing. Avoidance of execrable and transparently agenda-driven worldwide bullying hardly deserves that implication.
By the by, I want to thank you FXFrench for joining the natter on this thread. Something you remarked upon confirmed a theory of mine, and it makes sense through and through. Much appreciated.
Also wanted to say, years ago I traded with your firm and liked it â it was the first I went to when my broker of five years running first showed signs it would morph into its current dark-eyed incarnation.
Best to you, and may we meet again! 
So hereâs an ideal solution: a trading account with a foreign broker, opened on the name of an offshore company with a nominee director and shareholder, and the companyâs bank account likewise being overseas. A classic offshore scheme.
Nice to see Gary Gensler pushing Americans offshore - away from sponsoring his retirement.
If the fruits of our productivity were still desired, massive offshoring of industry would not have been undertaken and accomplished.
Garyâs retirement will experience naught but augmentation as he devoutly pursues the path heâs been set on by his handlers.
The industryâs massive offshoring has not yet taken place, IMO, when it comes to the small individual traders. Itâs actually odd that the retail Forex brokers have not yet partnered with the offshore incorporation providers to facilitate the matter and earn some nice extra income on the side.
I feel I already owe you a pint for the enjoyment given me from the ⌠lovely character of your questioning. Cheers BHS.
To be clearer: Small retail traders, no of course not. Most are struggling and Garyâs been such a help recently; however, industry in terms of making cloth, shoes, forged metals, fine industrial goods, even baseball gloves? Offshored, my friend. Their infrastructure has been nearly completed, I donât meant the temporary cheap stuff we use as train tracks and wiring and water conduits either. Any road this is a sub-matter to the larger map, but still a notable one. Work of that kind no longer sought.
Have a wee keek up above, and conveniently again I point to Forex-metal simply because they provided the evidence thereof due to slipshod documentary work and posting it.
⌠and just to add a note there, the connections cannot of course be offered publicly in the current bully-boy climate.
Despite what anybody thinks about it, avoiding the law as enforced by the CFTC is a crime until that law is changed. It may not be a moral crime, but it is still breaking the law.
Offshore companies exist for a purpose. That is avoiding taxes, regulation/laws, and/or to hide something. Or perhaps it is just easier to work as an offshore company.
I have the unique perspective of having worked for both offshore and regulated companies. I have worked in places where there are no controls and corruption is rife, but in certain circumstances, such an environment keeps the wheels of commerce well oiled for the astute and honest businessman swimming in a sea of sharks and snakes. I can tell you from experience that it costs A LOT more to run a regulated office than an offshore one. There is also a lot more pressure and unique legal challenges to overcome (and pay the lawyers to figure out lol) on a daily basis. I relish the challenge though and in the end it is rewarding. I do however miss living in Cairo after swapping it for nice, clean Sydney. Life seemed simpler there
Your intelligent debate caught my eye obviously. I was just a lurker in here before. Now look what you did!
âQuote (Originally by GypsyTrader)â
To âget away withâ something implies wrongdoing. Avoidance of execrable and transparently agenda-driven worldwide bullying hardly deserves that implication.
âEnd Quoteâ
Despite what anybody thinks about it, avoiding the law as enforced by the CFTC is a crime until that law is changed. It may not be a moral crime, but it is still breaking the law.
Itâs the licencing which does the trick, has done for centuries. Admirable in design, abhorrent in real effect to those who do still guide themselves by a human moral compass. Well, thatâs a sidebar but you will take my meaning.
That aside, and since my current trades are sliding along fine on their own, first with apologies please forgive me for reminding that avoidance is quite a different kettle of pips from evasion. Ask those lawyers your firm pay so well.
For my own part, another question: have CFTC become an enforcement arm of some government agency? Please elaborate.
Not to challenge the legal opinions you expressed, but Iâve had some trouble finding where it is in the law (sorry, could you also specify which law it is) that we might discover itâs a violation for the TRADERS to do business offshore?
Sorry my legal background peeking through, am labouring hard not to bore with excess detail and failing wordily as usual.
Offshore companies exist for a purpose. That is avoiding taxes, regulation/laws, and/or to hide something. Or perhaps it is just easier to work as an offshore company.
I have the unique perspective of having worked for both offshore and regulated companies. I have worked in places where there are no controls and corruption is rife, but in certain circumstances, such an environment keeps the wheels of commerce well oiled for the astute and honest businessman swimming in a sea of sharks and snakes. I can tell you from experience that it costs A LOT more to run a regulated office than an offshore one. There is also a lot more pressure and unique legal challenges to overcome (and pay the lawyers to figure out lol) on a daily basis. I relish the challenge though and in the end it is rewarding. I do however miss living in Cairo after swapping it for nice, clean Sydney. Life seemed simpler there
Indeed it is, as in many parts of the world where the middlemen are out in the open and once theyâre paid and satisfied they go to the next and donât follow you about to stab you in the dark then charge you to patch up the wounds. Yes, costs for a regulated office will be far higher; they the âother sortâ of middleman are on you now. Unique it is not; itâs nearly ubiquitous and donât think I blame you for co-operating. Your vulnerability, and here I speak of your firm, was a measure of success. And so, you caught their attention. They own the money system, and will dictate terms according to agendas most will never research or even suspect. Fact of financial life, and human beings are infinitely adaptableâŚ
âQuote (Originally by GypsyTrader)â
By the by, I want to thank you FXFrench for joining the natter on this thread. Something you remarked upon confirmed a theory of mine, and it makes sense through and through. Much appreciated.
Also wanted to say, years ago I traded with your firm and liked it â it was the first I went to when my broker of five years running first showed signs it would morph into its current dark-eyed incarnation.
Best to you, and may we meet again!
âEnd Quoteâ
Your intelligent debate caught my eye obviously. I was just a lurker in here before. Now look what you did!
An unexpected pleasure FXFrench, the best kind. Thanks most kindly, you have a gracious spirit. Hope to have leisure to chat again!
Hello, FXFrench
I, too, welcome you out of the shadows and onto this thread.
Iâd like to ask you to explain, in general terms, why a foreign firm with no presence in the U.S. would pay any attention to the CFTCâs tantrums?
No doubt, you will not want to get into the specific details of the CFTCâs action last December against your firm. But, I would like to use that CFTC action to set up some general questions regarding the CFTCâs reach.
Here is an excerpt from the CFTCâs January press release announcing the action against FXOpen:
Action part of CFTCâs nationwide sweep against foreign currency firms for failure to register under the 2008 Farm Bill, the Dodd-Frank Act, and CFTC regulations
Washington, DC â The U.S. Commodity Futures Trading Commission (CFTC) has obtained a federal court consent order requiring defendant FXOpen Investments Inc. (FXOpen), [B]a foreign firm,[/B] to [B]pay a $140,000 civil monetary penalty[/B] to settle CFTC charges that it [B]illegally solicited members of the public[/B] to engage in foreign currency (forex) transactions and operated as a Retail Foreign Exchange Dealer (RFED) without being registered with the CFTC (see CFTC Press Release 5974-11, January 26, 2011).
The order, entered on December 22, 2011 by Judge Virginia M. Kendall of the U.S. District Court for the Northern District of Illinois, also [B]orders FXOpen to close all U.S. customer accounts and return U.S. customer funds.[/B] The order also permanently bars FXOpen from engaging in any conduct that violates the Commodity Exchange Act (CEA) and CFTC regulations.
I have [B]bolded[/B] several phrases, for emphasis.
And here is a link to the entire press release.
Iâm not a lawyer. So, let me describe the situation as I see it, in laymanâs terms.
FXOpen had some sort of âpresenceâ in the U.S. â maybe just a website and a toll-free telephone number â which the CFTC alleges made you subject to all the regulations and restrictions applicable to actual U.S. forex brokers (RFEDâs, as the CFTC likes to call them). Because FXOpen was not registered with the CFTC, they allege that your âpresenceâ in the U.S. was illegal, and all your accounts with U.S. residents were, likewise, illegal.
Therefore, you were ordered to end your âpresenceâ in the U.S., close all your accounts with U.S. residents, pay a big fine, and donât do any of this again.
Here are my questions:
After ending your âpresenceâ in the U.S., and closing the offending accounts, why didnât you tell the CFTC to get lost? Specifically, why not (1) refuse to pay the fine, and (2) in the future, freely accept any U.S. residents who come to you âunsolicitedâ?
The CFTC is not your regulator. The CFTC is not the [B]World Forex Police,[/B] although they may imagine themselves to be precisely that. So, prior to paying any fine, if you were to tell the CFTC, âWeâre done. Piss offâ, what could the CFTC do about it?
Why is this any different from Bravehoststampâs hypothetical question about some Cuban court handing down some sort of judgment against someone outside their jurisdiction? Personally, I would love to receive notice of some sort of âjudgmentâ against me from a Cuban court, just for the pure joy of defying them, and holding them up to scorn. But, I digress.
If the CFTC says, âPay a big fine, get rid of all your U.S. clients, and never deal with U.S. residents againâ, and you say âYeah? Or what?â â whatâs the âor whatâ?
FXOpen is a company that values itâs reputation. To be seen as a rogue company that avoids acting in a lawful manner is not what we want.
FXOpen is pursuing legitimate licensing and regulation. We were successful in obtaining an ASIC license in Australia despite many questions arising from FXOpen Offshoreâs history. If we had ignored the CFTC as some companies have done, we would be blacklisted in other jurisdictions. The CFTC has a memorandum of understanding with other regulators. Even though FXOpen NZ Ltd (offshore) and FXOpen AU Pty Ltd are separate companies, the close relationship between the two companies means that FXOpen NZâs conduct can affect FXOpen AU as far as regulation goes.
The quick answer is that FXOpen doesnât want to be seen as a rogue company. The company may have begun as a small Seychelles offshore operation, but it has since grown into a global monster which is in part as a result of the company working hard on compliance with the law and operating as a legitimate broker, and not as a bucketshop that is only interested in fleecing cash from unsuspecting victims.
As a result of the settlement with the CFTC, our name was cleared and instead of being blacklisted like some other russian bucketshops also named in the civil suite but who ignored it, we are free to register with the CFTC in the future should we desire to enter the US market.
So you can see that no matter what our opinion of the law is, it is in our best interests to comply with it much as you or I would follow the road rules when driving to work.