A CySEC Broker Went Offshore, Then Went Dark: The Squared Financial Withdrawal Freeze

Finance Magnates reports that Squared Financial's offshore arm has effectively gone quiet. The broker is no longer accepting new individual or corporate accounts — its onboarding flow is reported to return a persistent “failed to check email” error — and clients have been reporting an inability to withdraw funds through June and July 2026, alongside difficulty reaching customer support.

The broker's regulatory history is the important part. Squared Financial previously held a CySEC licence in Cyprus, placing it inside the EU's MiFID II framework. In November 2025, CySEC settled with both the Cyprus entity (€35,000) and the group's Seychelles unit, SQ Sey Ltd (€50,000), over CFD marketing violations. In the months that followed, the Cyprus operation wound down — chief executive Philippe Ghanem is reported to have told management of an intent to wind down operations around May 2026 — and activity shifted to the Seychelles entity, which remains listed as an active securities dealer on the FSA Seychelles register.

That is where clients now find themselves: onboarded to, or migrated toward, an offshore entity that has stopped taking new business while withdrawals stall. A former managing director, Temitope Ijibadejo, is reported to have filed a petition with local authorities over pending withdrawals, and an alleged court-related freezing order in Cyprus has been cited as a cause of the withdrawal freeze. Trustpilot has flagged the broker's profile after detecting a number of fake reviews. Neither Squared Financial nor Ghanem responded to Finance Magnates' request for comment; the Cyprus entity, meanwhile, still appears on the business register with liquidation understood to be pending.

The lesson here is not about one broker's troubles; it is about the structure that produced them. When Squared Financial held a CySEC licence, a retail client in the EU or EEA had a specific set of statutory protections: money kept in segregated client accounts under MiFID II, ESMA leverage caps, negative-balance protection, and cover under the Cyprus Investor Compensation Fund up to €20,000 if the firm itself failed. Those protections attach to the regulated entity — not to the brand, the website or the account manager who onboarded you.

Move the same brand to a Seychelles book and that framework generally does not travel with it. The FSA Seychelles register does list SQ Sey Ltd as an active securities dealer, but an offshore securities-dealer licence is not the same instrument as EU authorisation: there is typically no ESMA-equivalent conduct regime, no negative-balance mandate, and — the part that bites when a broker goes dark — no investor-compensation scheme standing behind client money. A frozen withdrawal at an EU entity is a matter for a national regulator and a compensation fund; the same freeze at an offshore entity can leave clients with only a foreign court to petition.

This is why the entity on your client agreement is the single most important fact about an account, and why a licence being surrendered rather than simply held is a warning worth acting on. A broker that quietly migrates its book from a CySEC entity to a Seychelles one is not offering you a better deal; it is moving you outside the protections you had.

First, read the client agreement and the legal footer before you deposit, not after.Find the registered company name and licence number, then verify it directly on the regulator's public register — CySEC, BaFin, the FCA, the Central Bank of Ireland and others all publish searchable registers. If the entity named is offshore while the marketing implies EU regulation, treat that gap as decisive. Our EU broker regulation map and compensation-scheme breakdown set out which entity serves which region and what each scheme actually covers.

Second, be suspicious of any prompt to move to an offshore entity. A migration email, a “new account for higher leverage” offer, or a re-onboarding request that points at a Seychelles, Mauritius or Caribbean company is the moment your protections change. If you want the ESMA framework — segregated funds, leverage caps, negative-balance protection and a compensation scheme — you have to stay inside an EU/EEA entity, and the field of genuinely EU-regulated brokers is broad.

Two examples of brokers whose EU entities carry the exact protection this story is about losing: Pepperstone serves EU clients through Pepperstone EU Ltd (CySEC 388/20), with Investor Compensation Fund cover up to €20,000, and Interactive Brokers through Interactive Brokers Ireland Ltd (Central Bank of Ireland, C423427), under the Irish Investor Compensation Scheme up to €20,000. In both cases the entity holding your money is EU-authorised, and the compensation scheme is the backstop an offshore book does not provide.