The Cyprus Securities and Exchange Commission (CySEC) is actively collecting data and information from relevant stakeholders before deciding on further investigation into allegations made by Paphos Mayor Phedonas Phedonos. The mayor claims that certain Cyprus-based forex companies are linked to Latin American drug cartels and are involved in money laundering activities.

In a written statement, a CySEC representative emphasized the commission's commitment to investor protection and market integrity, stating that CySEC collaborates fully with domestic, European, and international bodies, including ESMA, EBA, AMLA, MoneyVal, FATF, and national competent authorities of other countries.

The representative explained that the forex market is a decentralized network of banks, brokers, and financial institutions facilitating currency transactions. Despite the absence of a single supervisory body for the entire forex market, CySEC is responsible for supervising domestic investment firms providing forex services in Cyprus, ensuring compliance with EU directives such as MiFID II and anti-money laundering regulations. Strict sanctions and enforcement measures apply for non-compliance.

Mayor Phedonos alleges that Cyprus has become a hub for international money laundering networks linked to Latin American drug cartels. He claims that several Cyprus-based forex companies have established complex networks of subsidiaries in Latin America, which are used to launder drug money. The mayor questions why these companies are attracting large client bases from countries known for cartel activity and how Cypriot supervisory authorities are allowing substantial money flows without investigating their origins.

In a public statement, the mayor expressed concern over the infiltration of drug money into Cyprus's financial and political systems, suggesting that some individuals in positions of power may be complicit. He called for immediate and transparent action from authorities to investigate these claims thoroughly.

Following the mayor's allegations, Police Chief Themistos Arnaoutis requested that Mayor Phedonos provide a written statement. However, the mayor expressed concerns about potential leaks and his personal safety, citing previous instances where information was disclosed prematurely. He criticized the police for allegedly politicizing the matter and failing to protect whistleblowers.

In a letter to the police chief, Mayor Phedonos emphasized the urgency of addressing the drug problem in Paphos and across Cyprus. He urged the authorities to utilize their resources effectively to dismantle drug networks and prevent further infiltration into the country's financial systems.

Mayor Phedonos plans to raise the issue in Parliament, seeking discussions on drug use among students and the alleged connections between forex companies and media outlets, which he believes may be used to influence public opinion and regulatory oversight. He also called on the Justice Minister and the government to publicly state the actions they are taking to combat drug trafficking and money laundering.