The Luxembourg Financial Sector Supervisory Commission (CSSF) found that ActivTrades Europe SA had failed to comply with key professional obligations relating to anti-money laundering and counter-financing of terrorism (AML/CFT) regulations, the regulator on 3 April 2025. Following an on-site inspection, the CSSF imposed an administrative fine of €14,000 on 24 December 2024.
In determining the type and amount of the sanction, the CSSF considered the legal and factual elements, the seriousness and duration of the breaches, the limited scope of the inspection and the financial situation of the firm, in line with the AML/CFT law.
ActivTrades leaves Luxembourg
The CSSF noted that ActivTrades Europe SA had voluntarily ceased its activities in Luxembourg on 1 January 2024 and had transferred all clients to a foreign legal entity by 31 December 2023. The firm’s voluntary liquidation was decided on 18 September 2024, and it was removed from the official list of authorised entities on 18 October 2024. The CSSF confirmed that the decision to terminate activities in Luxembourg was unrelated to the administrative sanction.
Due diligence failures
The CSSF identified significant shortcomings in the firm’s customer due diligence procedures. The authority reported that, for several clients, information and documentation regarding the origin of funds were insufficient. These issues were particularly concerning in cases where clients declared or made large deposits, or where alerts and reviews were triggered but not followed by in-depth analysis. Moreover, the periodic review process was also found lacking. In 2022, the firm did not perform reviews for a relatively high percentage of clients classified as high or very high risk.
The CSSF observed that name screening for new clients was not performed immediately upon establishing a business relationship. Instead, screening occurred only after client names were uploaded into the database, a process that could take up to one week.
Inadequate internal governance and compliance
The inspection revealed that the firm’s internal governance was insufficient, particularly regarding the compliance function. The CSSF stated that compliance staff failed to perform or formally document controls related to the handling of transaction monitoring and name screening alerts by non-compliance employees. Additionally, the compliance function did not escalate shortcomings to senior management, the board of directors or the risk compliance and audit committee.
Unregulated outsourcing of compliance tasks
The CSSF also criticised the undocumented outsourcing of day-to-day compliance tasks to another entity within the same group. At the start of the inspection, there was no outsourcing agreement in place and no monitoring by the firm’s compliance function.
Inappropriate staff training
The CSSF noted that the firm provided AML/CFT training based solely on UK regulations without adapting the content to Luxembourg’s legal framework.
Paperjam has requested a comment from ActivTrades.