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The Netherlands Authority for the Monetary Markets (AFM) has imposed a fine of €1.6 million on the online cryptocurrency and stock trading platform BUX for employing financial influencers, commonly referred to as “finfluencers,” to attract new clients.
The regulator determined that BUX’s referral strategies breached industry regulations by establishing financial incentives that were not in the best interest of consumers.
According to the AFM, BUX operated a “partners program” that compensated finfluencers, comparison websites, and existing customers with referral fees for directing potential new users to the platform.
Regulator Cautions Against Commission-Based Incentives
The regulator emphasized that such commission-based incentives are prohibited to ensure that investment firms prioritize the best interests of their clients.
“The prohibition on commissions guarantees that investment firms prioritize the interests of the client. It prevents clients from being directed in a manner that may not serve their best interests due to financial incentives,” stated the AFM.
The regulator contended that by compensating finfluencers, BUX encouraged them to promote the platform indiscriminately, placing referrals above the suitability for investors.
The fine was officially issued on November 18, 2024. BUX, which was acquired by the Dutch banking giant ABN Amro last year, has since discontinued its referral fee practices.
BUX CEO Yorick Naeff noted that the platform stopped referral payments in April 2023 and that ABN Amro was aware of the AFM’s concerns at the time of the acquisition.
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
Naeff defended BUX’s marketing approach, asserting that the referral program was never harmful to clients.
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However, he expressed concerns regarding the ambiguous nature of the Dutch ban on commissions.
While BUX initially challenged the fine in court, the court ruled in favor of the AFM. The company is still deliberating whether to pursue further legal action.
BUX Financial Services Acquired by Asseta Holding
In another development, BUX Financial Services has been acquired by Asseta Holding, the parent company of the UAE-based investment firm APM Capital.
This follows ABN Amro’s acquisition of BUX’s Dutch operations, which function as a neo-broker.
BUX’s UK division, previously regulated by the Financial Conduct Authority (FCA), offered contracts for differences (CFDs) and financial spread betting services under the BUX Markets brand.
However, prior to the acquisition, BUX Markets had already ceased operations to reevaluate its product offerings.
The company’s Cyprus-based entity, BUX Europe Limited, also terminated its Stryk-branded CFDs platform and transferred customer accounts to AvaTrade, although it still holds a Cyprus Investment Firm (CIF) license.
As reported earlier this year, Coinbase acquired BUX Europe Limited.
The rebranded entity, now known as Coinbase Financial Services Europe, is listed on the Cyprus Securities and Exchange Commission (CySEC) registry, as evidenced by a screenshot shared by the publication.
The acquisition provides Coinbase with a Cyprus Investment Firm (CIF) license, a crucial regulatory approval that allows the exchange to expand its operations within the EEA.
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