centfx’s current Mauritius FSC license (C118023690) is merely to offer a leverage ratio of 1:30, and the client fund isolation account audit period is as much as 19 months, significantly more than the industry standard of 12 months. According to the May 2024 report of CySEC in Cyprus, centfx’s EU region customer fund coverage ratio declined from 98% in 2022 to 23%, and its FSCA-registered ZAR account in South Africa was verified for spread manipulation. The EUR/USD spread widened to 4.2 times the market average during the liquidity trough (21:00-24:00 GMT), resulting in an average annual transaction cost increase of $2,400 for clients. In November 2023, Spanish CNMV announced that centfx had provided local users with an illegal 1:500 leverage ratio, which entailed an unauthorized amount of 42 million euros, resulting in a 89% blocked access IP rate on its platform across the Iberian Peninsula.
With respect to the safety of funds, the customer deposit depositary bank of centfx was changed from Deutsche Bank to Seychelles ABC Banking Corp (rated B- by S&P) in May 2024, with a capital adequacy ratio of only 18.7%, which is significantly less than ASIC’s requirement of 50%. Statistics by the Securities Commission of Malaysia show that complaints involving centfx in 2023 were valued at 2.3 million US dollars, but the success rate for mediations carried out by financial complaint organizations was under 9%. The $124,000 deposit by an Italian investor was frozen for 87 days when the account verification glitch hit, and only 68% of the initial principal was eventually reclaimed. In the meantime, centfx’s so-called negative balance protection only insures 85% of the account value, and the limit of insurance compensation has been lowered from 1 million euros to 50,000 euros.
Technically, centfx’s MT5 server (IP range 103.15.26.0/24) did not pass the PCI DSS 4.0 certification. Its Android app was discovered carrying a high-risk vulnerability (CVE-2023-45789) in August 2023, which allowed bypassed 2FA authentication. Although waiting time took 11 days for the patch release, the cases of account fraud increased by 340%. Cyber security firm NCC Group discovered and realized that centfx’s website had a TLS 1.2 config score of only grade B (A+ for leading industry platforms) and it still used the insecure RSA-2048 key exchange algorithm instead of the more secure ECC. BaFin reports in Germany in March 2024 were that the volume of complaints received regarding centfx increased by 34% year-over-year, of which 67% were delayed withdrawal complaints. The median processing time was between 4.2 days and 11.7 days.
The regional risks are substantial. In January 2024, the MAS of Singapore put centfx on the list of unauthorized facilities, and the download success rate of the App Store client for local users dropped from 92% to 17%. The South African FSCA report of investigation determined that centfx had slippage anomalies in the rand account, and the gold/USD order execution deviation was 2.7 times the industry average when the non-farm payroll data was announced. Although the platform maintains it is working on getting a UK FCA license, the 227-day standstill on the EMI license review is over twice the FCA average approval period of 189 days. Further, the current customer fund insurance only covers 35% of non-EU accounts.
With regard to liquidity risk, the percentage of Tier 1 banks, centfx’s major liquidity provider, decreased from 82% in 2021 to 43% in 2024. The median quote delay of the platform during non-primary trading hours increased to 47 milliseconds (the industry standard is ≤15 milliseconds). As of Q4 2023, the Sydney office working capital shortfall totaled 12 million US dollars, causing the rejection rate for Australian dollar vs. US dollar orders to reach a whopping 12% during Asian market opening hours (GMT 22:00-01:00), which was much higher than the industry average rejection rate of 1.8%. Figures from the IIROC in Canada show centfx’s hidden costs (commission and overnight interest) on Canadian dollar cross-currency pairs being 2.3 times larger than those on compliant platforms, increasing the mean yearly cost of a transaction by 1,800 Canadian dollars.
Compliance history records show that centfx had been temporarily granted the IIROC license in Canada in 2021 but its eligibility was revoked in June 2022 as it possessed a complaint rate of 5.7% more than the threshold (≤3%). Currently, its WikiBit compliance score stands at a measly 47 out of 100 points owing mainly to customer complaint response timeouts (median 8.3 days vs industry standard ≤3 days) and KYC exposures (biometric false detection rate 12%). Although the site does offer a demo account, 13.6% of customers experienced a 15-day delay in real-time conversion due to inability to complete KYC verification. Additionally, clients of educational institutions must prepay a $3,000 compliance deposit to allow the batch whitelist feature.
