March 4, 2019, | AtoZ Markets - Last Friday, the Austrian Financial Market Authority (FMA) issued a warning against CryptoTrader company. According to the official Austrian regulator’s statement, the aforementioned firm performed unlicensed services related to the banking operations. The regulator, however, did not provide a link to the website belonging to the fraudulent firm and it is difficult to specify the company’s activity.
Austrian regulator FMA warns against scammers
The official announcement on FMA’s website’s reads:
“Among other things, the Austrian Financial Market Authority (FMA) may inform the public in accordance with section 4 (7) of the Austrian Banking Act that a named natural or legal person is not authorized to carry out certain banking transactions (section 1 (1) Austrian Banking Act) which requires information from the public and is proportionate to the potential disadvantages of the person concerned.
With the announcement in the official gazette to the Wiener Zeitung from 28.02.2019, the FMA informs therefore that
is not entitled to perform banking transactions requiring a license in Austria. Therefore, the provider is not allowed to commercially accept third-party funds for administration (§ 1 para. 1 no. 1 BWG first case).”
Latest Austrian FMA warning
Over the past few years, the number of firms which global financial authorities have marked as “scam” increased. Earlier in June 2018, the Austrian financial watchdog has cautioned investors against dealing with the company that goes under the name Sun Capital that was offering trading and investment services to Austrian clients. Reportedly, Sun Capital Limited was lacking a trading license. Therefore, the Austrian regulator has decided to issue a warning against dealing with this firm. Sun Capital is based in Saint Vincent and the Grenadines. The company is operating online via tradeu2.com and is claiming to have an office in Italy, Germany, and Switzerland.
How scammers usually work?
As in the case of binary options, CDFs or Forex fraudsters, the scammers that work with cryptocurrency start by convincing their victims to deposit their funds. Once this is done, they will allow the person to trade and then, as soon as the client tries to withdraw funds, the scammers disappear with all the money. The environment in which cryptocurrency exists makes such frauds easier to perform. The reason for this is that transactions of digital assets are harder to track. For example, a user could transfer bitcoins to someone without knowing the person whom he sends the crypto. Also, the bitcoin recipient's address is unlikely to be associated with a real person. Due to this reason, it is unlikely that the number of fake cryptocurrency brokers working on the Internet will decrees. However, a downturn in the cryptocurrency market can help slow them down, as the crypto experts assume.