ISignthis top customer in hot water over trading without a license

Troubled tech group iSignthis has been hit with more bad news after one of its customers was ordered to stop all trading by the German financial regulator, a move likely to dent the group’s revenues.

Germany’s federal financial supervisory authority, BaFin, issued a warning and statement about iSignthis customer FCorp — also known as RI Markets — after learning it had been operating in the country without being licensed.

In recent months regulators have been pinging a host of clients of iSignthis, which provides know-your-customer technology and payment platform services to a range of online trading exchanges and groups.

iSignthis chief executive John Karantzis: The company has sued the ASX in the Federal Court, saying it has unfairly kept its shares suspended.
iSignthis chief executive John Karantzis: The company has sued the ASX in the Federal Court, saying it has unfairly kept its shares suspended.

Australian regulators have warned consumers to avoid FCorp and its platform RI Markets, alleging the company may be running an online trading scam.


iSignthis brushed off concerns of market operator ASX last month following a warning by the Australian Securities and Investments Commission about the Marshall Islands-incorporated FCorp and its dangers to Australian consumers, saying it did not do business with FCorp in Australia.

iSignthis revealed in November that its relationships with FCorp and another group, Immo, made up 35 per cent, or $2.2 million, of its total revenues in 2018.

Whilst stating it doesn’t do business with FCorp locally, iSignthis does, however, do business in Europe with the company, sources close to iSignthis confirmed. ISignthis declined to comment.

ISignthis’ shares have been suspended from trading on the ASX since October amid concerns about the group’s disclosures and the calibre of its clients, many of which are subject to regulatory warnings for not being licensed or for allegedly being linked to online trading scams including Australian group AGM Markets, which in turn counted alleged unlicensed binary options trading platforms OziFin and OT Markets as clients. The stock is currently subject to reviews by the Australian Securities and Investments Commission and the ASX.

Earlier this month, iSignthis took the unusual step of suing the ASX in the Federal Court alleging the market operator has unfairly kept its shares suspended and had leaked confidential information that was provided by iSignthis in response to an official request for information by the operator.

The ASX’s suspension continues as it investigates concerns about the company’s customer base.

ASIC has also warned about another iSignthis customer based in the Marshall Islands, Nona (also known at FTO Capital). Following an ASX query in November, iSignthis revealed that 45 per cent of its revenue in 2018 came from companies which have either been wound up by ASIC or have been the subject of warnings by the corporate regulator.

Moreover, iSignthis subsidiaries used Danish lender KAB as its settlement provider. KAB is now under criminal investigation in Demark for money laundering breaches and has been taken over by the government.

There have been no allegations of wrongdoing by iSignthis.

Earlier this month, iSignthis downgraded its underlying earnings to $6.5 million for fiscal 2019 from a November forecast of $10.7 million, blaming in part its ASX suspension.

iSignthis chief executive John Karantzis took another swipe at the exchange on Wednesday, saying in a letter to shareholders the ASX had blocked its recent announcement that showed the number of high-risk customers the group now had was 6 per cent because it was deemed by the exchange as marketing material.

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