An Australian court has imposed a record AU$300.2 million penalty on three collapsed CFD brokers—USGFX, EuropeFX, and TradeFred—for systemic unconscionable conduct between 2018 and 2020. Union Standard’s Australian entity, operating as USGFX, faces the largest fine at AU$156.7 million, while EuropeFX and TradeFred must pay AU$114.1 million and AU$29.4 million respectively. The penalties are temporarily stayed until July 2026.
ASIC found these brokers deliberately targeted inexperienced Chinese customers using aggressive sales tactics to push highly risky CFD products. EuropeFX and TradeFred profited from client losses in 95 to 99 percent of cases. All three entities have since collapsed, with Union Standard entering voluntary administration in mid-2020 and losing its Australian licence.
The regulator noted 68 percent of Australian retail CFD traders lost money in fiscal 2024, totaling over AU$458 million. EuropeFX faces additional sanctions including permanent restraint from offering financial services and mandatory customer deposit returns.
FXnCO Insight
Brokers profiting predominantly from client losses face escalating regulatory enforcement, signaling heightened compliance scrutiny across CFD markets globally.
Source: Finance Magnates