Sadly, not a single broker of those sued by the CFTC took a stand against them in courts (in particularly, challenging their jurisdiction over the broker). As a result, those brokers are now where the CFTC wanted them to be and do what the CFTC wanted them to do.
Dear FXFrench,
I find your choice of words interesting, especially how you differentiated âoffshoreâ from âregulatedâ companies.
Hi Shatners Last Stand
There are no offshore regulators to my knowledge. Where are these offshore brokers located?
Hi FxFrench,
Mauritius and St Vincent Grenadines. I can probably guess what you are thinking, but from my perspective, it is better than nothing at all. I read your last post to Clint, so I can understand your company perspective also.
I know the companies probably said they are âregulatedâ there but neither place has a regulator. They have only company registration services. But hey, if it suits your personal circumstances to trade there, best of luck! 
Thanks for the clarification between âregulationâ and âregistrationâ. Though Iâm not sure what we actually get for FOREX âregulationâ in the US. Forex accounts receive no protections like the securities and commodities broker accounts get. For example if my US broker (OANDA) goes belly up, my account is toast. Of course, I could theoretically recover some monies via normal bankruptcy proceedings, but by the time the big fish get their cut of the spoils, I doubt there would be anything left for me. So I really didnât think I had much to lose by going overseas in that respect.
Hello, fxfrench
Thanks for your reply to my questions.
FXOpen has made a business decision to âgo along, in order to get alongâ. And thatâs fine. Your firm must choose the path that you deem best for reaching your business goals.
Personally, I hate tyranny, and I refuse to cooperate voluntarily with tyrannical regimes. Maybe thatâs just an American attitude. Maybe you canât understand why I wouldnât just automatically go along to get along with such regimes.
In my view, the CFTC is the âposter childâ for tyrannical regimes â and whatever can be done to bring the CFTC to heel, Iâm all for it. In the meantime, if I am seen as a ârogueâ trader by the CFTC, I couldnât care less. I consider the opinions of the CFTC to be less than worthless.
Anyway, good luck polishing your worldwide image as an obedient, squeaky-clean foreign forex broker. I sincerely hope that things go well for you.
As for your ability to re-enter the U.S. market with the blessing of the CFTC, sometime in the future, Iâm scratching my head a little. This market is basically saturated with obedient, squeaky-clean forex brokers who offer the pathetic forex products sanctioned by the Almighty CFTC â [B]50:1 maximum leverage[/B] (oh, goody!), and so forth. Why would this market need yet another broker, offering these shabby products?
FXOpen offers [B]500:1 leverage[/B] on small Standard accounts, 200:1 leverage on medium-size Standard accounts, and 100:1 leverage on large Standard accounts. Why would you want to trash your products, in order to be compliant with CFTC tyranny in the U.S. forex market, [B]which the CFTC is intent on destroying?[/B]
Clint, itâs plain simple: complying is easier than resisting. I just hope there will be more foreign brokers like FinFx Trading is the Largest Forex Broker in Finland | FinFX or FX Choice who couldnât care less in their sovereign jurisdictions about the US CFTC demands. Then the complying brokers will start losing business to them, so everything will come to its logical end.
Bravehoststamps,
Thank you for the tip on FXChoice. I didnât see them in the master list. Just downloaded their demo. They do have a nice selection of products⌠Their CFDs are swap free, plus they donât expire with the underlying futures like some brokersâperfect for holding longer term positions. Meanwhile, the currency spreads are good, and the swaps are some of the most generous Iâve seen. For example, long AUDUSD looks like its paying out about 4%. Only thing I saw peculiar was the recent trading hours for Nikkei CFD, like they switched liquidity providers a couple of weeks ago, or maybe its just the demo data has a problem.
Another example of why not to invest money in an offshore broker, they not under the oversight of CFTC. For the luxury of being protected by a government entity if a company decided to pull a scheme like taking all of someones profits because they made up a ridiculous rule who does the trader appeal to?
None of these offshore companies that accept US clients answer to anyone, there is a high chance that a trader could waste their time and money finding non compliant brokers.
One indeed needs to be careful with offshore brokers. Yet not all offshore brokers are scam. The ones I mentioned are not.
Damned if you do and damned if you donât? We would be damned if we sat in a BVI registered bubble doing all the usual bucketshop techniques to make you lose, and damned if we go the legit regulated route. Is there something in the middle?
I also object to tyranny, but as a non American it is not my place to fight it. Thatâs your job. I have no vote in the USA.
Itâs going ok so far. Itâs not easy complying with a regulator but in the end it adds a lot of credibility to our company.
There you go. At the moment, conditions in the USA do not suit us either, however should things change in the future, it is good to know that we have the option of entering the market.
Conditions are different in Australia too and FXOpen AUâs conditions will reflect that. The upside is that you will be protected by Australiaâs regulation which at the moment is good for traders and good for our business.
Since FXopen is being represented here do they accept US clients who have residence in Australia, Canada, UK, etc�
That is one way US traders try to bypass the rules set by CFTC.
Thatâs one heck of an odd way. For most, itâs a lot easier to simply open an account with a foreign broker like FinFX.fi or MyFXChoice.com that accept the US customers with no restrictions. Or, if one wants an account with a foreign broker which does not directly accept the US customers, they can just set up an offshore company with a nominee director and open the trading account on the companyâs name.
The CFTC is presently building a case against them and it would compromise those monies as those accounts will be frozen soon.
For offshore companies it will be traced back as illegal during tax filing since there is no conflict of interest with government agencies any longer due to the patriot act and protecting against terrorism, when the IRS shares information with CFTC it will lead to prosecution of said company owner for running an illegal offshore business.
The Dodd-Frank Act does not subject foreign American-owned companies to these restrictions. Why should they suffer any reprimand after all taxes have been duly paid?
SMAN1109,
Concerned offshore newbie hereâŚplease explain where you are getting your information about the CFTC building a case and preparing to freeze accounts. This doesnât make any sense to me. I read about what happened with the lawsuits connected with the CFTCs âNationwide Sweepâ on foreign currency firms, but there was no mention of customer accounts ever being frozen. I donât think thatâs even possible unless the country in which the firm resides agrees to do it.
He is making this up. To date, none of the foreign brokers sued and fined by the US CFTC has frozen their customersâ accounts.
Many of those offshore brokers are running ponzi schemes and donât have the money they attest to so the accounts are not frozen in the literal sense but become useless after enforcement because there is no new clients to pay for the older clients accounts.
The dodd-frank act restricts american participation in foreign markets in regards of currency exchange and this is including american owned businesses.