IC Markets Fined €200k for High Leverage Breach

The Cyprus Securities and Exchange Commission (CySEC) has levied a €200,000 fine on IC Markets (EU), the Cyprus-regulated entity operating under the IC Markets brand. The fine is a consequence of the broker’s alleged violation of leverage rules within the European Union. According to CySEC, IC Markets (EU) knowingly and intentionally offered its clients leverage levels up to 1000:1 by onboarding them under an offshore entity, which contravenes the EU’s strict leverage limits.

Offshore Jurisdictions

In the EU, FX, and Contracts for Difference (CFDs) brokers are permitted to provide leverage up to 30:1 to retail clients, a regulation set by the European Securities and Markets Authority (ESMA) to protect retail investors from taking excessively risky leveraged positions. However, according to CySEC’s announcement, IC Markets’ Cyprus operation sidestepped this rule by channeling clients through entities in offshore jurisdictions where higher leverage is allowed.

Despite the allegations, IC Markets has firmly denied any wrongdoing and plans to appeal the decision. The company claims that CySEC disregarded irrefutable audited evidence and instead relied on the testimony of a former employee who was dismissed for misconduct.

According to IC Markets, CySEC’s reliance on biased testimony while ignoring undeniable evidence suggests a pattern of selective and disproportionate application of regulatory authority. The company argues that this endangers transparency, market integrity, and fair competition, and is committed to challenging the decision through the appeal process.

This isn’t the first time IC Markets has faced regulatory scrutiny from CySEC. The regulator intervened in similar breaches by the broker in 2021, at which point IC Markets assured CySEC it would take corrective measures. The repeated nature of the violation played a significant role in CySEC’s decision to impose the fine.

IC Markets operates across multiple jurisdictions, including Australia, Seychelles, and the Bahamas. These offshore locations permit brokers to offer higher leverage levels than those allowed within the EU. The firm’s global presence includes recent expansions into Africa, highlighting its strategic efforts to grow despite regulatory challenges.

The broader context of CySEC’s action reflects the ongoing tension between regulators and financial service providers over leverage limits. ESMA’s cap on leverage seeks to protect retail investors, but it also limits the trading flexibility that some brokers offer.