A few hours after the Swiss National Bank announced the removal of the cap against the Euro, Alpari UK, one of the forex brokers that we previously featured in our forex brokers reviews has filed for insolvency.
The sudden move by the Swiss Bank to remove a 3-year old cap against the Euro saw volatility in the forex markets rise to an incredible rate while liquidity remained very little. Because of the extremely low liquidity caused by the Swiss Bank announcement, a lot of forex brokers could not close client positions.
A lot of forex traders sustained heavy losses, which in many cases were way over their account Equities, forcing the brokers to carry the liability. In a statement released on their website, the UK broker announced that it was not in a position to carry customer losses and therefore was filing for insolvency.
Alpari UK becomes the first broker to file for insolvency as other brokers find avenues to get out of the mess. FXCM, another broker who we have had the honor of featuring in our forex broker reviews, has had to borrow money to sustain its operations in addition to cancelling its listing on the New York Stock Exchange. Meanwhile, IronFx, HotForex, among other forex brokers have sent out statements declaring that they are still in operation, and the Swiss Bank announcement had little impacts on their financial statuses.