The list of crypto firms flagged by the Financial Services and Markets Authority (FSMA) of Belgium has been expanded. The regulatory authority has warned investors in its jurisdiction against XTB-Markets.
XTB-Markets (www.xtb-markets.com) has been flagged due to concerns that the crypto trading platform is showing signs of suspicious activity. The FSMA has told investors to avoid responding to any business offer made by XTB. The crypto trading firm becomes 121 on the list of companies and platforms flagged by Belgium’s FSMA.
The regulator said that the firm was using the same methods employed by crypto trading firms. The trading platform offers an individual an investment that appears easy to benefit from. They try and convince an investor that they don’t need to know a lot about cryptocurrencies for them to invest in digital assets.
These firms claim to have crypto experts on board whose job will be to manage the investments one makes in digital assets. The regulator points out that the firm will tell an investor that they can withdraw funds at any given time and that this withdrawal is guaranteed.
This method of operation is consistent with firms that aim to defraud investors of the funds in their investment pool. Once one places their investment in the firm purporting to be a legitimate crypto trading platform, they soon realize that the funds cannot be withdrawn and neither return on the investment guaranteed. Victims end up losing their money to these fraudulent platforms, and it is this practice that the Belgian FSMA is trying to curb.
Struggle to find fraudulent websites
The FSMA keeps a list of firms and platforms which it suspects of offering fraudulent schemes to potential investors. The list was started in February 2018 when the regulator placed 20 crypto related platforms for potentially fraudulent activity.
Firms are added to the list based on complaints from investors who have been offered crypto investments. When customers report these firms, it helps the regulator to deal with the firm and alert other investors about the possible loss of funds that could occur.
The FSMA and other regulators across the world need help from traders who notice suspicious behavior on a crypto trading platform. The regulators do not register these firms, and hence, this makes it difficult for the regulators to flag these firms.
The illegality of the activities these firms are involved inputs them outside of regulatory bodies’ radar. Although bodies such as the FSMA eventually find and flag illegal crypto trading firms, the process is longer and less effective than it could be.
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