Last Friday, it was reported by AtoZ Forex that Plus500 is experiencing a system overload, which has been the main reason behind the delays in some of the client’s activities. However earlier today, the major industry player has announced the fact that their UK client’s accounts are frozen, due to a Money Laundering Regulation investigation. Resultantly, these issues of Plus500 have affected the shares of the spread-betting firm.
Reportedly, Plus500 Shares Plunge as much as 30% right after the release of the announcement below:
As an authorised financial institution, Plus500UK Limited has a regulatory obligation to comply with the UK Money Laundering Regulations 2007 and other rules and guidance which requires us – amongst other things - to identify and verify our customers, the nature and purpose of the business relationship and source of funds. Whilst we understand the inconvenience this will cause, we have no alternative but to place a restriction on your trading account until such time as we have been able to undertake a complete review of the documentation and information we hold currently on you.
Until the review has been satisfactorily carried out, you will be unable to open any new trades on your account, deposit or withdraw funds. If you have any open trades you will, however, still be able to freely service your existing positions with additional Maintenance Margin, although again, will not be able to withdraw funds until the review is complete.
If, during the review of your account, you are required to provide additional proof of address documents, please make sure you follow these guidelines:
The proof of address document must be issued by one of the following: a financial institution, a utility company, a government agency or a judicial authority. Examples include:
-Bank statement or -Credit card statement or
-Electrical bill or -Water or gas bill
-Council Tax bill -Tax letter
(** Please note that a mobile (cellular) bill cannot be accepted.)
The document must:
-Display your exact name and address
-Be not more than 6 months old
-Visible in full
We assure you that, as soon as the review is successfully complete, you will be able to re-commence trading activities, including depositing and/or withdrawing funds.
We value you as a customer and sincerely apologise for any inconvenience caused. Thank you for your patience.
The Plus500 Team
The shares of Plus500 is listed on the London’s junior AIM market, and until the documentation issue and UK money laundering investigation is over, it is possible that it will even drop further. Due to the fact that the money laundering investigation will take some time, all clients’ documents are required to be up to date and accessible before any Plus500 clients can execute withdrawals or trades again. Hence, the brokerage is in a rush to confirm them by any means. In the meantime, the traders of Plus500 are currently unable to deposit, withdraw or open any new trades.
Meanwhile it is also worth mentioning that there are a number of rumours about Plus500's business structure. One of the rumours focusses on the company's revenue. It states that most of the revenue the company generates is created by proprietary dealings of one very close "ally" of the company, JP Morgan´s asset management arm. The company is not very transparent on its profitability nor it's profitability makes sense as the numbers do not add up. Nonetheless, with the recent 30+ per cent stock price plunge, the company value also declined from $1.3 billion to approximately $888 million.