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How to lose 1 million rubles between Cyprus and Russia. Trader and broker Alfa Forex

How to lose 1 million rubles between Cyprus and Russia.  Trader and broker Alfa Forex


A common mistake of traders is ignoring the client agreement and offer. Traders do not read them, which is what brokers use. Similar examples were given in this review – trading conditions may not coincide with those specified in the offer due to a mismatch between companies. The story below is another example of the need to still look to whom you are going to transfer money. And the most interesting thing about it is that the guilt of both parties is ambiguous, but this does not make it much easier for the trader. How a client lost almost 1 million rubles at Alfa Forex broker, read in this review.

Broker Alfa Forex in Russia and Cyprus – different companies

Having a license from the regulator in theory means protecting the rights of investors. But often controversial issues run into a blank wall called law. In January 2021, trader X appealed to the Judicial Collegium for Civil Cases in Moscow against the decision of one of the Moscow courts dated November 2020. The essence of the claim is the satisfaction of the plaintiff’s claims against the Alfa Forex broker (namely Alfa Forex LLC) in the amount of 900 thousand rubles.

In May 2016, trader X opened an account with a broker and replenished it with 900,000 rubles. According to the trader, the broker did not fulfill its obligations and wrote off the money. In June 2020, the trader turned to the Alfa-Forex broker with a demand to return the debited money, but was refused. After that, the “debriefing” went to court.

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The court unexpectedly sided with the broker. The fact is that, according to the court, the trader entered into an agreement with the Cypriot company Alfa-Forex, which is part of the Alpha consortium, in May 2016. The broker Alfa-Forex LLC received a certificate of registration in Russia on June 30, 2016, therefore the company specified in the lawsuit cannot physically be the defendant. The broker’s domain at the time of the conclusion of the contract, like the brand, belonged to Alfa Capital Holdings (Cyprus) Limited.

The court agreed that both companies are related and are part of the Alfa Group. But he also noticed that at the moment the alfaforex.ru domain belongs to the Russian company Alfa-Forex LLC, while trader X entered into an agreement on the alfa-forex.ru domain. Thus, the court ruled that there were no concluded agreements between the Russian licensed broker Alfa Forex and the plaintiff. And there is no reason to call the Russian company the legal successor of the Cypriot broker.

Can the Alfa-Forex broker be blamed for default in this case? From a legal point of view, no.

  • Firstly, we do not know the circumstances under which the trader lost his 900 thousand. After all, even with the Cypriot regulation, such actions directly fall under the definition of “fraud”. And it is unlikely that a broker of this level will risk its reputation.
  • Secondly, formally the court is right. The trader entered into an agreement with another legal entity. Therefore, despite the obvious connection of the group of companies, the trader making claims is to blame.
  • Thirdly, Cypriot and Russian are different regulations. And if a trader opened an account in a Cypriot company with a CySEC license, it would be strange to make claims against a company with Russian regulation.
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This example shows well how important it is to carefully read the offer, to look at who the contract is concluded with and still look a little at the regulation. Even if there is practically no sense from it. The trader can only prepare a new lawsuit against the Cypriot company, apply to the Cypriot regulator and prove the illegality of debiting money. The task is not easy.

About Eric R. Brinkley

CEO Fxbotreview.com Algotrader. Blogger. I write interesting content, do content with you, and also maintain a website with independent reviews of forex software. Trading robots, Indicators etc..

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