Belgium’s Regulator FSMA Warns against New Cryptocurrency trading platforms. This time, the published blacklist includes 28 crypto trading platforms that advertise cryptocurrency trading to investors. In reality, they are fake companies that steal consumer’s funds.
The FSMA wrote on their page: “Cryptocurrencies are the hype of the year. Fraudsters are well aware of that and try to attract customers online through fake cryptocurrencies and huge profits. The only thing they actually do, however, is taking the customers’ money and disappear. It is as simple as that.”
Testimony of a Scammed Consumer
The FSMA frequently receives complaints from consumers who suspect fraud. To show the public how important it is to remain vigilant while investing in cryptocurrencies, the FSMA shared one of the complaints they have received:
Here is a small part of the letter they got: “I do not have the encryption keys, and so have no access to my investment. The receipt for my purchase that they forwarded to me has no VAT number or authorization number of a credit institution. Although they use phone numbers based in France, these are not connected to any physical address and no address for them is known in France. So why do they use phone numbers from the Paris region?
Their website does not have any general terms and conditions.
And most of all, they are not returning my money.”
You can read the full complaint here at FSMA.be.
Judging from the story above, it sounds like a typical bucket shop broker which we are used to seeing in the Binary Options industry too. The only difference is that they are now targeting cryptocurrency customers.
We took a look at a few of the blacklisted websites to see exactly what’s going on there. What’s common is that they all seem to be hiding behind fake addresses and anyone could be behind these websites. There is no real information to be found about the founders and employees of the companies. What’s even more interesting is that in the terms and conditions of some of these brokers we found “bonus policies” which are typical binary options bonuses! Remember that these bonus schemes were banned a long time ago by regulators and all the legitimate firms stopped offering them. It now seems that these scam bonus schemes are back but this time in the crypto world. Example from e-cryptoney.com – one of the blacklisted scam platforms:
TERMS AND CONDITIONS
1. EVERY BONUS REQUIRES A TRADING TURNOVER BEFORE ANY WITHDRAWAL IS MADE BY THE CLIENT. BY ACCEPTING
This particular scam platform requires 30x trading volume of your total deposit plus the bonus to release your funds. Another fact we can expose is that their terms and conditions include the expression “Option Trading” which is suspicious because they are advertising crypto trading and not Binary Options.
Image: One of the blacklisted Crypto Trading Platforms actually mentions Binary Options and CFD’s in their terms and conditions.
One of the brokers outright mentioned CFD’s and Binary Options in their terms and conditions which clearly exposes what we already concluded – getting clients attracted through cryptocurrencies but leading them to a bucket shop binary options broker.
Platforms Shutting Down
Going through the FSMA’s list of 28 blacklisted crypto trading platforms, most of them seem to have shut down after the warning was issued. But rest assured that many more will be popping up under new names and brands but the shady methods will be the same as explained above. That’s why it’s crucial to really do a thorough research and make sure the firm you are investing with is a regulated and trusted one.