According to Belgium’s regulator, the FSMA, Belgian investors have lost at least €10 million between May 2019 and September 2020 to crypto and Forex scams.
October 12, 2020 | AtoZ Markets – Belgium’s Financial Services and Markets Authority (FSMA) has made a shocking revelation. Investors in Belgium have lost almost 10 million euros ($11.8 million) to fraudulent crypto investment schemes, the FSMA said in a report on October 5.
How Belgian investors were defrauded
Describing the techniques used by the crypto scammers, the FSMA said:
“These platforms often use very aggressive methods to try to persuade you to invest ever larger sums. They will also try to persuade you to let them take control of your computer remotely so as to be able to make certain payments.”
In addition, Belgium’s apex financial regulator reported that these fraudsters use “fake advertisements that typically use images of celebrities.’ Potential victims get beguiled by platforms displaying these adverts circulating on social media. When interested folks click on them, cryptocurrency shysters call them to ‘to discuss an investment offer.”
Besides Bitcoin and other digital currencies, these scammers also offer investment schemes in Forex trading, binary options, and contracts for differences (CFDs).
The Belgium watchdog had already warned investors about potential crypto scam activities back in 2018. Since that time, FSMA has added fake credit letters to its list of unscrupulous investment offerings. These the watchdog said claim ‘to offer loans on favorable terms but intend to steal money.’ Also, investors need to stay away from fraudulent wealth management and alternative investment scams, FSMA mentioned.
Is this the reason UK FCA banned crypto derivatives for retail customers?
As AtoZ Markets recently reported, UK’s top financial watchdog, the Financial Conduct Authority (FCA), has banned the sale of crypto derivatives as they have no value to retail customers. The ban, which does not apply to crypto trading, will come into effect on January 6, 2021.
The British regulator gave several reasons to justify its decision to ban crypto CFDs for forex brokers. The FCA listed volatility in crypto prices, the‘lack of inherent value,’ inadequate understanding of cryptocurrency systems, and other reasons. However, the UK watchdog specifically mentioned that the ‘prevalence of market abuse and financial crime in the secondary market’ is why retail players should stay away from crypto derivatives.
Think we missed something? Let us know in the comment section below.