Regulator names 12 fraudulent online trading companies that most often target Russian investors

Maria Nikolova

Russia’s Federal Financial Monitoring Service warns that a raft of foreign entities are offering investment services in Russia without having the right to do so.

Russia’s Federal Financial Monitoring Service has published a warning on its website about a number of foreign entities that illegally offer online trading services to Russian investors.

These entities, according to the regulator, abuse the insufficient knowledge of Russians about the securities market regulation, and solicit investments into activities such as Forex trading. Typically, the fraudsters create a facade that the deposit of investors are increasing thanks to gains and demand additional investments. Then, any attempt by the clients to withdraw their money, the balance suddenly becomes “zero” and the firm stops communicating with its clients.

According to the regulator, the companies that most often engage in such fraudulent activities with regard to the Russian market are: «Teletrade», «GRANDCAPITAL», «Delloy Trаde», «GLOBAL FX», «Kappabrokers», «GO CAPITALS FX», «KBCapitals»; «10 BROKERS»; «Swis Trade»; «BORN to TRADE», «Barclays Trade», «WerCrypto».

All of these companies are non-Russian entities and do not have the requisite licenses nor are they members of self-regulatory organizations.

Let’s note that the Central Bank of Russia continues its quest against companies that are not licensed in Russia but seek to find way to target Russian investors. In July last year, the Bank published a Letter to banks, non-credit financial firms and self-regulatory organizations, in which it warns Russian financial companies against serving as intermediaries for foreign companies.

The regulator deems it unacceptable that an investor may obtain information and/or sign a contract with a foreign entity via the website and/or office of a Russian company.

The Bank of Russia has repeatedly warned investors of the risks involved in signing a contract with foreign financial entities: the consumers are not protected by Russian laws in case of problems with the companies. However, the incessant stream of complaints serves as a piece of proof that violations continue. Most often, investors complain that they were not informed they were entering into a contract with a non-Russian entity. Instead, the investors were misled that they were signing contracts with the entity whose Russian office they were visiting.

In July 2018, the central bank reminded market participants that the Russian laws impose a set of restrictions on foreign entities that want to offer their services in Russia. Avoiding these restrictions carries a heavy amount of risks for consumers and undermines the reputation of the financial industry in Russia. In case of law violation (for instance, publishing of a link to a website of a foreign entity on the website of a Russian entity), the Bank of Russia may penalize the company that has committed the violation.

Read this next

Digital Assets

Crypto.com secures preliminary approval to operate in Canada

Crypto.com, one of the longest-established crypto platforms, has become the first digital asset platform to sign a Pre-‘Registration Undertaking’ with the Ontario Securities Commission (OSC) in Canada.

Retail FX

CySEC hits IC Markets One with regulatory warning

The Cyprus Securities and Exchange Commission has once again stepped up its fight against unauthorized brokers.

Uncategorized

XTAGE now offers bitcoin and ether trading to 3.6M Brazilian investors

Brazilian financial services giant XP has officially launched its crypto trading platform XTAGE, which was built on major American stock exchange Nasdaq’s trading technology.

Institutional FX

FX volume drops 7pct at CLS Group in July 2022

FX settlement specialist CLS Group today reported that the executed volumes of currency trading on its platforms were notably down in July.

Digital Assets

Web3 startup PIP integrates with Binance ecosystem

Web3 payment provider PIP has announced integration with the Binance ecosystem, which allows the firm to vastly develop and propose needed products and improvements that are worthy of competing with others chains.

Industry News

Celsius $750m insurance claims are fraud, says lawyer seeking EU crypto superfund

“It is an intentional deception in aid of a billion-dollar securities offering.”

Institutional FX

DGCX brokers authorized to provide derivatives trading and clearing services

The DFM is looking to provide multiple asset classes such as; equities, ETFs, equities’ futures, crude oil futures, etc. to meet the growing demand from its diversified base of local and international investors.

Digital Assets

EQONEX leaves “crowded crypto exchange space” amid crypto winter

“The recent extreme market volatility and declining trading volumes have added to the headwinds being felt by exchange operators. We take a realistic view that our exchange will not move the needle for us financially over the near-to-medium term.”

Digital Assets

FTX and Paradigm partner for spreads trading: lower risk, lower fees

“This structured spread trading product is the first that will enable crypto investors to utilize cash and carry trades through FTX and Paradigm.”

<