A CySEC Broker Went Offshore, Then Went Dark

Finance Magnates reports that Squared Financial's offshore arm has effectively gone quiet. The broker is no longer accepting new individual or corporate accounts — its onboarding flow returns a persistent “failed to check email” error — and clients have been reporting an inability to withdraw funds through June and July 2026, alongside difficulty reaching customer support.

The broker's regulatory history is the important part. Squared Financial previously held a CySEC licence in Cyprus, placing it inside the EU's MiFID II framework. In November 2025, CySEC settled with both the Cyprus entity (€35,000) and the group's Seychelles unit, SQ Sey Ltd (€50,000), over CFD marketing violations. In the months that followed, the Cyprus operation wound down — CEO Philippe Ghanem is reported to have told management of an intent to wind down operations around May 2026 — and activity shifted to the Seychelles entity, which remains listed as an active securities dealer on the FSA Seychelles register.

That is where clients now find themselves: onboarded to, or migrated toward, an offshore entity that has stopped taking new business while withdrawals stall. A former managing director, Temitope Ijibadejo, is reported to have filed a petition with local authorities over pending withdrawals, and an alleged court-related freezing order in Cyprus has been cited as a cause of the withdrawal freeze. Trustpilot has flagged the broker's profile after detecting a number of fake reviews. Neither Squared Financial nor Ghanem responded to Finance Magnates' request for comment. The Cyprus entity, meanwhile, still appears on the business register with liquidation understood to be pending.

None of the above is a verdict — enforcement and any liquidation will run their course through the Cypriot and Seychelles authorities. But the shape of the situation is exactly what EU rules are designed to insulate retail clients against.

The single most useful lesson here is that a broker's brand tells you nothing about the protection you actually hold. The legal entity on your client agreement does.

When Squared Financial operated as a CySEC-authorised firm, EU/EEA clients sat inside a specific and enforceable set of protections:

• Investor compensation. CySEC firms contribute to the Investor Compensation Fund (ICF), which covers eligible retail clients up to €20,000 if the firm fails and cannot return client money.
• Segregated client money. Under MiFID II, client funds must be held separately from the firm's own capital, in the client's name, ring-fenced from the broker's operating account.
• A supervisory and complaints route. CySEC supervises the firm on an ongoing basis, and clients have recourse to the Financial Ombudsman of the Republic of Cyprus.
• ESMA conduct rules. 30:1 maximum retail leverage on major pairs, mandatory negative balance protection, standardised risk disclosure, and best-execution obligations.

A Seychelles FSA registration provides no comparable retail compensation scheme, materially lighter ongoing supervision, and limited cross-border enforcement. When an offshore broker freezes withdrawals, there is often no ICF-style backstop and no ombudsman to escalate to — recovery depends on local courts and insolvency proceedings, which is precisely the position Squared's clients now describe.

This is the mechanism that turns a corporate wind-down into a client loss. Inside the EU, a firm failure triggers a compensation scheme. Offshore, a firm failure can simply mean funds become inaccessible while a liquidation grinds on.

The Squared Financial case follows a pattern that recurs across the industry: a broker holds a Tier-1 EU licence for credibility, then surrenders or lets that licence lapse and steers clients toward an offshore entity with looser rules — sometimes higher leverage, sometimes just lower compliance cost. The brand, website and logo stay the same. The protections do not travel.

If you already trade with a broker, or are about to open an account, three checks close most of this risk:

1. 1Read the entity name on the client agreement. It should state explicitly which company holds your funds and which regulator supervises it. “Squared Financial” is a brand; “SQ Sey Ltd, Seychelles” is a different regulatory reality from a CySEC-licensed Cyprus firm.
2. 2Verify the licence on the regulator's own register. For CySEC, check the CySEC register; for BaFin, the BaFin database; for the FCA, the FCA register. If your account entity is not on a Tier-1 register, you are not covered by that regulator's protections — regardless of what the homepage claims.
3. 3Confirm the compensation scheme in writing. An EU retail account should disclose ICF (or the relevant national scheme) coverage. If the paperwork offers no compensation scheme, that is the offshore trade-off made explicit.

If you are an EU or EEA resident, the practical takeaway is not “avoid Cyprus brokers” — CySEC is a genuine Tier-1 EU regulator and the ICF is a real backstop. The takeaway is to confirm that the specific entity holding your money is the CySEC-licensed one, and to treat any nudge toward an offshore entity as a downgrade in protection, not an upgrade in trading terms.

Brokers that keep EU clients inside a fully EU-regulated entity remain the sound default. Plus500 serves EU clients through a CySEC-authorised operator (Plus500CY Ltd, 250/14) with ICF coverage; eToro serves EU clients through eToro (Europe) Ltd under CySEC (109/10); and Pepperstone routes EU retail clients through Pepperstone EU Ltd (CySEC 388/20), backed by group licences at BaFin, the FCA and ASIC. In each case the point is the same: the compensation scheme, segregated funds and supervisory route are attached to the EU entity, and that is the version you want on your agreement.