Financial Commission warns traders against Traders Codes (Depaho)
The Financial Commission, a self-regulatory compliance specialist for the financial services industry, is ramping up its scrutiny of unregulated brokerage firms.
Today, the independent association warned against a company called Traders Codes (Depaho Ltd).
Although the FinaCom didn’t provide further details, the aforementioned company seems to be a fraudulent clone posing as Depaho Ltd, which operates the retail FX brands GTCM, FXGM and TRADEAPP.
The genuine company is already licensed and regulated by the Cyprus Securities and Exchange Commission (CySEC). However, Depaho had its license temporarily suspended by CySEC following several allegations of multiple violations in July.
The FinaCom has been sharpening its focus on retail investment and trading brokers in recent months. The regulator not only tries to protect consumers from FX scammers, but also has a dedicated tool to help cryptocurrency investors check if an investment opportunity is a scam.
Dubbed ‘Blockchain Warning List,’ the service provides information about the potentially damaging behavior of certain digital asset providers. The entries in this list include crypto exchanges and wallets suspected of conducting illegal activities depending on reports and complaints filed by their customers.
The Financial Commission previously warned investors against companies or associations that approach victims of forex traders claiming that, for a fee, they can help them recover the sums invested or the losses incurred on unlawfully FX trading platforms.
The self-regulatory body cautions investors that “a group of individuals” were trying to usurp the identity of FinaCom itself by using a similar logo in order to give the appearance of trustworthiness and legitimacy.
This type of activity is typical of the fraud mechanism known as a ‘recovery room’. Although FinaCom could help people who have lost money, it never charges a fee, guarantees money back, or gives special preference to anyone who files a formal complaint.
The scam artists buy and sell lists of former clients of brokerages so that they promise the recovery of money lost or profits not received – for a fee in advance.
And while the regulator recommends that investors use its database of member brokers and check their disciplinary records, it adds that its services for traders are offered absolutely free.
The FinaCom also notes that it only investigates claims that are filed against a member firm, where its Dispute Resolution Committee (DRC) uses a proven method to process complaints and deliver a decision. Financial Commission does not service customers of brokers who are not members, thus it cannot process complaints against non-members and no further action will be taken if the broker is not part of the organization.