Crown Currency Exchange Goes Into Administration: The Lessons Learned

Crown Currency Exchange Goes Into Administration: The Lessons Learned

The events unfolding at Crown Currency Exchange are horrendous and could leave around 13,000 people out of pocket. In addition, many customers who have used their international money transfer service face losing thousands of pounds. The Cornwall based business which employs around 40 staff, have gone into administration and owe an astonishing £20 million.

Internet forums, blogs and even facebook fan pages have been created by angry customers absolutely astonished by the prospect of seeing hard earned money being swallowed up.

We try to uncover some of the potentially dubious practices of CCE and provide an easy to read summation of events. Next time you send money overseas, it is important to use a reputable currency firm that are FSA authorised (not merely registered).

1. Not operating segregated client accounts.

As a bureau de change and only registered (not authorised) by the FSA, Crown were not required to operate segregated client accounts. These segregated accounts should ‘ring fence’ your funds and are totally separate from the day to day running of a business. It ensures protection and security of funds. Reputable foreign exchange firms that facilitate international money transfers will be authorised by the FSA and operate properly managed segregated client accounts.

2. Selling Above Inter-Bank Rate – A Recipe for Disaster

Whilst there is one thing trying to attain market share by offering such ‘cheap rates,’ it is another selling euro or dollars above the inter-bank rate.  It is commercial madness to sell at a loss. This is the equivalent of selling shares cheaper than on the open market, which would ring alarm bells. Any company offering to sell at a loss indicate there are tremendous in-house cash flow problems or the alternative view of reputable firms spoken to, that there is some type of currency speculation going on.

3. Send Money Overseas – FSA Registered vs. Authorised

Being merely ‘registered’ with the FSA is a far less regulatory burden which could compromise safety and security of funds. Ensure that you use a commercial money transfer broker that is FSA authorised. These firms are required to segregate client accounts (separate from the day to day running of business) as laid out by the Payment Services Regulations.  They are subject to far higher degrees of scrutiny from the FSA, required to show a strong balance sheet and maintain a strictly defined level of capital at all times. In addition, all senior members of staff and directors need to jump over the
hurdle of a ‘fit and proper’ test.

4. Demanding 100% of your money up front for delivery at a date in the future

This is another cause for concern and adds weight to the argument that perhaps there is currency speculation with client funds going on. Traditionally, using a forward contract when sending money overseas can be a great tool to manage currency exposure and protect against adverse currency fluctuations. However, reputable FSA regulated foreign exchange brokers will normally ask for only 10% deposit when the order is made, and the balance due on completion of the contract.

It is totally unfair and a cruel act carried out by CCE. They seem to have operated a high risk business model. However, there are a number of reputable foreign exchange firms that operate a low risk business model,  are stringently regulated and deliver a better-than-bank exchange rates on international money transfers. By using a currency broker who tick all the FSA boxes, are authorised, operate segregated client accounts, have a strong balance sheet and price in a reasonable manner (not ludicriously above interbank), these firms can offer a great alternative to traditional high street banks.

On behalf of us here at, we wish all people involved a speedy resolution and a sincere hope that funds will be returned to customers as quickly as possible.

The team at


  1. Hippolito Falkenethal 11 years ago

    Hey, very interesting post, it really got me thinking. Thank you.

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