Example of the unexpected consequences of ESMA regulation in Europe

Looking for information about a broker that I found, Axecc, it reminded me why the new regulation of the ESMA is a disaster for European traders and investors, despite the fact that this regulation is made to “save them”.

This, after all, is nothing but a confirmation of what I said about it a long time ago.

I know, I know that most of the industry and others agree with this issue, and in a way I am.

I mean, I do not think it’s a good idea to use leverages of more than 30: 1 or by chance, because it’s not good for you as a trader.

At most, using 15 or 20, we would have plenty to do all the trading that we want.

But that is another issue.

Let’s see if I say it in another way:

The ESMA may prohibit the European trader from trading Forex with leverage greater than 30 to 1.

But the ESMA does not prohibit the European trader from trading in futures with a leverage of 200 to 1.

Nor does the ESMA prohibit the European trader from opening a sports betting account and blowing up the account.

Neither can the ESMA prevent the European trader from seeking alternatives such as warrants, instruments of nuclear “toxicity” for any trader. But of course, these instruments are provided by banking.

Nor can ESMA prevent the European trader from transferring its money to accounts of brokers outside the continent and making financial bets of any kind.

This last case is the one that I have seen today, with disastrous results for the trader and that I will tell later.

Okay, the bureaucrats who rule in Europe can see all this and decide that they then prohibit all trading futures, sports betting, poker, and even then monitor all computers similarly to North Korea.


Yes, I do not tell you that they cannot do it, and with that “end speculation.”

The problem is that doing so would not end the speculation, but would multiply it by infinity.


Because that would lead Europe to a de facto communist state, and we already know how the communist territories are like a magnet for black market, which on the other hand is the only market there is, because the totalitarian state is the antithesis of the market.

That is, in a communist country there is no market because there cannot be.

It is impossible, at least officially.

The State provides everything and there is nothing to negotiate.

Neither bid nor ask or anything.

ESMA trading and capital flight from Europe

The problem here is simple: the ESMA causes a great loss to the European industry, and therefore, causes net loss of jobs in Europe, that although there are a few thousand jobs that are lost, in the end it is a loss of capital.

That capital passes into the hands of other places such as the United States, Asia or Oceania.


Because many European traders will open more futures accounts in American brokers where they have no restrictions.

Because others will open accounts in Australian, New Zealand and Asian brokers in general.

That money comes out of Europe.

That is, it is full service import.

The engineer, who works in Madrid, receives his salary and when he has 10,000 Euros saved he decides to open a futures account with GFF brokers, for example, in the US to do day trading of the SP500 future with 100:1 leverage.

Maybe that would have been done in a European CFD broker if ESMA was not there.

The same thing if you decide to open an account in IC Markets in Australia, which does not impose restrictions on you to operate with 100: 1 leverage on the EURUSD.

Do you understand what happens?

That’s 10,000 Euros that leave Europe, that otherwise would have stayed and would have contributed to maintain a job here.

What happens?

With tens of thousands of cases like that, every year many jobs are lost in Europe and many millions of Euros go out to other jurisdictions.

Have bureaucrats avoided speculation?

Not at all.

The only thing they have done is fuck the European brokers.

Only those that are implemented globally as IG Markets, CMC Markets, XTB, Admiral Markets, with offices outside Europe, can escape in some way to this blow.

But in any case, what happens is that this type of measure strengthens the position of international brokers that will take accounts each year from hundreds of thousands of Asian traders – for example – who would otherwise have ended up putting the money in Europe.

In other words, not only a loss of money in the short term, but a problem for the European industry to survive in the long term.

Anyway, I’m going to comment on the case that I saw.

Looking for information on the Axecc cryptocurrency broker, which has really scant information on its website and that does not smell good, I found a forexpeacearmy thread in which an Italian person had opened an account with this broker in the summer of 2018.

This member commented that the change of regulation in Europe (you can see it in the first paragraph) had made him look in other places and that is why he decided to open a 1,200 euros account in that broker.

In the end, apparently, the money vanished and “if I saw you I do not remember”.

Those 1,200 disappeared from the accounts of Europe and ended up somewhere else.

If there were no restrictive (stupid) regulation such as ESMA, that money would probably have remained on the continent.


In short, this is not a defence of whether trading is good or bad or anything like that, but of the effects that restrictive regulations in the economy end up creatin: always harmful effects.

It is the same as the Venezuelan economy.

Nicolás Maduro can put all the price and capital controls he wants.

The more controls put more corruption and speculation will be on the street.

The educational aspect of this example is that it teaches us one thing: that along with the increase in speculation (brought up by bureaucrat interventions), poverty increases.

Original article: Ejemplo de las consecuencias inesperadas de la regulacion ESMA en Europa