Scammers impersonate CySEC officers and representatives

These cases involve imposters claiming to be CySEC’s officers or appointed representatives who are soliciting investors for fees in exchange for settlement of fake compensation claims.

The contact often takes place via e-mail, says CySEC, and gives the illusion of an authentic message that contains a promise to help traders get compensation for the potential damage they may have suffered as a result of fraud by regulated forex / CFD brokers.

On top of that, the commission said that a few clone websites are impersonating the organization in many areas and contexts.

‘Clone firm’ scams have increased in recent years, including those targeting Cypriot brokers, as fraudsters have become more sophisticated in their ways. Often times, the scam works by setting up a clone website to look exactly like the genuine website they are copying.

Scammers often acquire real material available online, edit the content and mix genuine details with fraudulent details to make themselves look legitimate.

The Cyprus financial watchdog warned in July that there was evidence of fraudulent impersonation of its officials who are engaged with firms under CySEC’s supervision.

The regulator cautioned the public about people who approach clients of suspended brands, or those under investigation, claiming that they can help them recover their capital.

Per a regulatory circular, sophisticated campaigns targeting investors of online trading firms are used as part of the scam which typically involves a specific pattern:

• Fraudsters pose as CySEC officers, appointed representatives of CySEC, legal advisors, other Cypriot supervisory authorities, or fictitious entities.
• They reach out to clients of CySEC-regulated entities, often using emails or phone calls that appear genuine. These communications may include accurate information such as CySEC’s telephone number, address, official stamp, logo, and forged signatures of CySEC officials.
• The fraudsters offer false assistance to investors in filing compensation claims against sanctioned firms, typically online trading companies that offer speculative investment products.
• Through these initial contacts, the scammers illicitly acquire additional personal information from unsuspecting individuals.

CySEC has consistently issued public warnings whenever such cases are identified. However, the watchdog stresses that it is crucial for investors to exercise caution, remain informed, and verify the legitimacy of any communication they receive. If individuals encounter suspicious activities or believe they may have been targeted by fraudsters, they report the incident to CySEC or the appropriate authorities for further investigation.

Under current laws, CySEC has no powers to force internet companies to refuse financial advertisements or block access to their domains. It can only ask them to take down fraudulent promotions once they have been spotted. As a result, fraudsters and promoters of high-risk schemes have been able to place advertisements claiming to be based or licensed in Cyprus.