Is FX Crypto Club scam or reliable? The FMA has warned investors against this unauthorized broker that has been offering financial products in the country.
January 18, 2020, | AtoZ Markets – Scams are ever-present in the financial markets and, more specifically, the foreign exchange (forex) and cryptocurrency industries. This fact has been highlighted as the Austrian Financial Supervisory Authority (FMA) issued the first investor warning of the year. The recent warning is against the parent company CapCorp, which is behind the firm "FX Crypto Club".
Is FX Crypto Club Scam or Reliable?
The Austrian regulator has again updated its warning list – adding FX Crypto Club which is operating in the country without proper authorization. According to the FMA, the broker cannot perform banking transactions that require a license in Austria. Therefore, FX Crypto Club is not permitted to accept third-party funds for administration according to (Section 1 (1) 1 first case BWG).
However, according to the warning from FMA, this broker is based in the Marshall Islands. This is an immediate red flag and residents of Austria should avoid dealing with this company.
Furthermore, as per the FMA, FX Crypto Club offers customers CFDs and cryptocurrency investment tools. Recently, Austria implemented new anti-money laundering (AML) regulations. This requires companies operating in the country to apply for Austria's FMA license. Notably, crypto derivatives are not subject to this regulation. However, they should comply with ESMAregulation as well as FMA restrictions on selling these instruments to retail investors.
FMA keep warning against the increasing number of dubious brokers
In 2019, the FMA issued 98 investor warnings as never before, thus exceeding the peak of 2018. At that time, the domestic guards had issued 62 warnings. Moreover, the warnings of fraudulent brokers had already surpassed the peak year of 2011 in 2018. In that year, the authority issued 51 investor warnings.
The watchdog has also urged the public to always verify the identity of the company and not trust a firm that hides its identity.
What do you think about FMA blacklisting FX Crypto Club? Let us know in the comments section below.