The Netherlands Authority for the Financial Markets issued a €1.6 million fine against BUX online trading because it broke financial rules when using financial influencers.
According to the AFM, BUX referral programs damaged customer welfare because they contained financial rewards. The regulator detected that BUX offered two referral packages called affiliates and friends that paid commission rewards to finfluencers and users.
The AFM maintains this restriction because investment companies should focus on client wellbeing instead of profit making. Business purchasers gain priority status when investment firms run operations under banned commission rules. As the AFM emphasizes setting this rule protects customers from business incentives that might affect what is best for them.
BUX CEO Defends Referral Program Amid Regulatory Scrutiny
On November 18, the Dutch authorities enforced an official penalty to penalize financial sector promotions made through social media influencers. The banking giant ABN Amro purchased BUX last year which resulted in the termination of its referral fee system.
Yorick Naeff from BUX stated that payments ended in April 2023 and ABN Amro knew about AFM’s concerns when BUX became part of the company. Against BUX’s defense Naeff admits that the referral program did not hurt customers yet he highlighted the problem with Dutch ban on commissions.
Netherlands Poll:
135k households (2%) own crypto, 2x yoy
108k own BTC, 27k own ETH
20k have +€1,000 in crypto
Total value owned: €100-150M pic.twitter.com/A8pmM4jymL— Tuur Demeester (@TuurDemeester) October 25, 2017
Although BUX first fought the fine in court they experienced legal defeat when the court sided with AFM. The business team considers all possible ways to continue with its legal proceedings.
BUX has gone through major company reorganization during recent months. BUX Financial Services became part of Asseta Holding after this company bought the Dutch investment firm APM Capital. After ABN Amro acquired BUX’s Netherlands operations BUX became a neo-broker through this business move.
BUX Europe Limited Shuts Down Stryk CFDs Platform
BUX Markets operations under the UK Finance Conduct Authority stopped and the company took time to evaluate its British product lineup. The Cyprus Investment Firm (CIF) licensed BUX Europe Limited closed its Stryk CFDs platform and sent its customers to AvaTrade while remaining operational under its CIF license.
The US crypto exchange Coinbase bought BUX Europe Limited during the first part of this year. As part of the acquisition, Coinbase Financial Services Europe obtained a CIF license from Cyprus Securities and Exchange Commission (CySEC) to proceed with European business operations.
BUX needs to overcome strict rules and major company changes to successfully pursue its goals within the developing financial market. Increasing regulator focus forces BUX to keep updating its compliance framework during corporate transformation efforts.
Its evaluation of the AFM ruling joins with its recent agreements and strategy changes when forming the next steps for its business. The regulatory authorities now monitor influencer financial advertisements more strongly.
