Yesterday (18/5) shares of Plus500, one of the world's leading forex broker, dropped nearly 40% after they froze numerous client accounts under their UK wings in order to launch an Anti Money Laundering (AML) review.
Yesterday (18/5) shares of Plus500, one of the world's leading forex broker, dropped nearly 40% after they froze numerous client accounts under their UK wings in order to launch an Anti Money Laundering (AML) review.
As a forex broker, Plus500 provides services with regulated label under UK Financial Conduct Authority (FCA) which requires its license holders to maintain strict AML measures. However, apparently Plus500 has often provided services for clients without asking for proof of address documents. Consequently, an investigation was launched by the FCA to learn whether Plus500's procedures in signing up new clients are compliant with AML measures or not.
Probably as the result of the investigation, the company is in communication with the FCA to enhance its AML measures. But meanwhile, around 5% of Plus500 UK accounts have been suspended. Impacted clients may have been asked to submit proof of address documents as required. Frozen accounts will be unable to open trades, make deposit, or withdrawal, before the review is completed.
In response to questions asked by Business Insider, Plus500 representative did not disclose the exact number of frozen accounts, but it could be in the range of thousands. Additionally, as hundreds accounts are being verified each day, the review can run into a couple of weeks.
Established in 2008, Plus500 official headquarter is in the UK, but it is actually based in Israel. One of the most well-known Market Maker-type broker, it provides trading services through proprietary platform and various assets including indices, stocks, energies, commodities, and ETFs. It is also one of few forex brokers in the industry that managed to experience a successful Initial Public Offering (IPO) on the AIM Market in London Stock Exchange in 2013.