Investment firm (CIV) iTrade Global (CY) Ltd., regulated by the CySEC, is the operator of the CFD, FX, and cryptocurrency broker InvestFW. Based on the most recent data, the broker is especially effective in Portugal, where over 90% of website visitors originate from. It is thought that the Israeli owners of Capitalix, an offshore broker, also operate InvestFW. The entities in question share the same Cypriot directors. Here’s our first assessment.

Brief Story of Katerina Papanicolaou’s Scam

In Q32022, the CySEC-regulated InvestFW saw just about 166,000 visits to its website; but, its offshore subsidiary, Capitalix, attracted about 500,000 visitors. But this is not out of the ordinary for Capitalix, which covers a far bigger market (without the necessary authorization) and draws customers from South America, Asia, and the MENA region. Capitalix operates under a securities dealer licence from the FSA Seychelles.

Overall though, the data shown by the two linked brokers—Capitalix and the CySEC-regulated InvestFW—is rather good.

CySEC

Cyprus’s financial regulator is the Cyprus Securities and Exchange Commission, or CySEC for short. The European MiFID financial harmonisation law is complied with by CySEC’s financial regulations and operations as a member state of the EU.

A sizable portion of foreign retail forex brokers are registered with CySEC. Many binary options brokers had previously chosen CySEC as their regulator of choice before 2018.

The following are the duties of CySEC:

• to oversee and manage the trading activities of the Cyprus Stock Exchange, as well as the Stock Exchange’s listed companies, brokers, and brokerage firms.
• to oversee and administer mutual fund management firms, collective investment funds, licensed investment services organisations, and investment advisors.
• to authorise investment firms, including brokerage houses, brokers, and consultants, to operate.
• against applying disciplinary actions and administrative consequences against investment consultants, brokerage houses, brokers, and any other natural or legal person covered by the Stock Market Laws.

Recent changes to the law governing CySEC’s duties have given it considerable authority over the organisations it oversees. This includes the ability to conduct investigations, search properties, and share any results with authorities in other countries.

How CySEC’s Investor Compensation Process Works
When an investment firm under CySEC’s supervision can no longer meet its obligations to clients, a specific compensation process is triggered under Directive DI87-07. Here’s how it unfolds:

Declaration of Inability: CySEC first assesses the firm’s financial situation. If it determines that the firm is unable to pay its clients and sees no quick remedy, CySEC makes a formal announcement confirming this status.

Activation of Investors Compensation Fund (ICF): Once the firm’s inability is confirmed, the ICF steps in. The next key step is an official invitation from the ICF to eligible clients—called “covered clients”—to submit their compensation claims.

Claim Submission Guidelines: The ICF lays out detailed instructions. This typically includes:

The procedure for submitting a claim,
Deadlines by which claims must be filed,
The specific documentation required to support a claim.

These details are then published in at least two national newspapers to ensure wide notice, along with contact information and a physical or online address for updates on application progress.

Calculating Payouts: Compensation is based on the contractual relationship between client and broker, but with clear caps:

Clients may receive up to 90% of their covered claim, but no more than €20,000—whichever is less.
For instance, if an investor’s claim is €50,000, the maximum payout is €20,000. For smaller claims (e.g., €10,000), the client receives 90%, or €9,000.

Ongoing Updates: The ICF keeps clients informed throughout, updating claimants about the status and any next steps.

At the time of writing, precise instructions for Maxigrid clients haven’t been published, but the process above reflects what clients can generally expect when a CySEC-regulated firm fails.

CySEC takes action against Maxigrid Ltd and initiates compensation for clients!

Bans and administrative fines for Maxigrid Ltd.

Ultimately, Maxigrid Ltd. was the target of action taken by the Cyprus Securities and Exchange Commission (CySEC) on June 17, 2022. The announcement included four directors who were barred from performing management duties for Cyprus Investment Firms (C.I.F.s.) and administrative fines totaling € 210,000.

Withdrawal of Maxigrid Ltd’s License
Maxigrid Ltd, once active as a Cyprus Investment Firm (C.I.F.) under the names Dualix and A.G.M. Markets (license 145/11), had its license withdrawn by CySEC on February 14, 2022. This decisive move came in the wake of serious legal troubles triggered by German law enforcement. Following coordinated investigations, German authorities made arrests tied to allegations of significant financial misconduct involving Maxigrid. As prosecutions and inquiries continue in Germany, CySEC responded by revoking Maxigrid’s operating privileges—underscoring its mandate to protect investors and preserve the integrity of Cyprus’s financial sector.

CySEC enforced the following administrative punishments in particular.

• Israeli shareholder and former non-executive president of the board Roy Almagor is fined €200,000 administratively and is prohibited from managing C.I.F.s. for a period of five years.
• Jekaterina Pedosa, the company’s executive director, is fined €10,000 administratively and is prohibited from managing C.I.F.s. for a period of five years.
• Katerina Papanicolaou, the company’s executive director, is prohibited from performing managerial duties in C.I.F.s. for a period of two years.
• Ex Executive Director of the Company Nikolai Monogarov receives a two-year ban from exercising management functions in C.I.F.s.

With the trade names Dualix and A.G.M. Markets, Maxigrid Ltd. has been conducting business as a Cyprus Investment Firm (C.I.F.). The licence number 145/11 was revoked on February 14, 2022. Following an enforcement action by German authorities that led to the arrests and impending indictments of multiple defendants in Germany, Maxigrid fell apart. As of right now, the inquiry is still on.
Maxigrid’s collapse came in the wake of significant law enforcement activity, with German investigators spearheading a probe that has already resulted in arrests and is expected to lead to further indictments. The ongoing investigation highlights the cross-border nature of regulatory enforcement in the financial sector and underscores the severity of the actions taken against the firm and its leadership.

The actions of Maxigrid Ltd. caused harm to thousands of victims throughout Europe.

Impact on European Investors
The fallout from Maxigrid Ltd.’s activities was felt keenly across Europe, leaving a significant number of investors out of pocket. Many individuals suffered direct financial losses due to their involvement with the company, which ultimately failed to meet its obligations and facilitated transactions for questionable brokerages. As a result, trust in regulated brokers was eroded, with victims struggling to recover their investments and get redress for the damages incurred.

Under CySEC licence number 145/11, Israeli Roy Almagor’s Maxigrid Ltd. and its Chief Executive Officer, Jekaterina Pedosa, have been processing payments as an unlicensed payment processor.

Maxigrid Ltd’s Role as an Unlicensed Payment Processor
Despite holding a CySEC licence, Maxigrid Ltd—under Israeli Roy Almagor and CEO Jekaterina Pedosa—operated beyond its regulatory boundaries. The company acted as a payment processor for a string of broker scams, including RoyalsFX, LincolnFX, 10CryptoMarket, RoyalCBank, and others, without proper authorisation for such activities.
To facilitate the movement of client funds linked to these fraudulent brokers, Maxigrid utilised two main channels:

Its own cryptocurrency platform, BitandBuy, enabling fast and discreet crypto transactions.
A corporate bank account held with Lithuania’s GlobalNetint, which provided access to the European banking system.

Through these mechanisms, Maxigrid processed payments on behalf of broker scams, bypassing the legal frameworks and safeguards that normally protect investors from financial misconduct.

Maxigrid employed BitandBuy, its cryptocurrency platform, and its bank account with Lithuania’s GlobalNetint for this purpose.

Katerina Papanicolaou’s Company Claims It can’t Pay the Victims

Additionally, Maxigrid doesn’t seem to be able to fulfil its commitments resulting from investor claims, and CySEC doesn’t think it will be able to do so very soon.

Why Can’t Maxigrid Ltd Meet Investor Claims?
CySEC’s ongoing investigation revealed that Maxigrid Ltd. Is facing serious financial difficulties that prevent it from repaying investors. According to the regulator, the company’s current financial situation is so precarious that it simply cannot meet its obligations to clients who have lodged compensation claims.
Put plainly, Maxigrid has neither the necessary funds nor any realistic prospect of recovering liquidity soon. The company’s status as a member of the Investors Compensation Fund (I.C.F.) offers some recourse, but CySEC’s official statement makes it clear: these financial troubles are both immediate and severe. This forced CySEC to formally recognize Maxigrid’s inability to pay out, in line with paragraph 18(1)(a) of Directive DI87-07 of 2019, and to set compensation procedures in motion for affected investors.

The Cyprus Securities and Exchange Commission, or CySec, declared on June 7th that the Maxigrid victims’ compensation process had begun.

“CySEC has determined that the Company (member of the I.C.F.) for the time being, for reasons directly related to its financial circumstances, is unable to meet its obligations arising out of investors’ claims and has no early prospect of being able to do so,” the circular reads, citing paragraph 18(1)(a) of Directive DI87-07 of 2019 for the Operation of the Investors Compensation Fund (R.A.D. 76/2019).

What Happens Next for Maxigrid Victims?

The I.C.F. will then invite covered clients to submit their claims against the corporation, if any, and will specify the process for submitting applications for compensation as well as the deadline for doing so. The fund then publishes the information, including the address where investors can get updates on the status of their applications, in at least two local newspapers. This ensures that affected investors are informed of the opportunity to make a claim and understand the steps they need to follow. By making the details public, the I.C.F. aims to provide transparency and accessibility throughout the compensation process, allowing clients to stay updated on the progress of their applications and any further requirements.

The exact claim procedure for Maxigrid’s clients has not yet been announced, so affected investors should stay alert for further updates on how and when to file.

How Much Compensation Can Victims Expect?

According to the provisions of the contracts governing each client’s connection with the failing broker, the amount of compensation payable to each client is determined. However, the maximum sum typically stays under €20,000.

The maximum payment for legitimate claims was modified by the CySEC earlier in 2019 and is now equal to 90% of the total amount of covered claims or €20,000, whichever is less.

Coverage is therefore equal to Min (90 percent x the claimed amount, or €20,000). Accordingly, an investor holding €50,000 with a C.I.F. that experiences difficulties and is unable to make payments will get €20,000 from the I.C.F. But, if the claim is for €10,000, the coverage will only be 90%, or €9,000, instead of 100%, as was previously determined.

No announcement from the I.C.F. regarding the specific claim process for Maxigrid clients (victims) has been made yet. We’ll keep you informed.