CoinWorld reports:
Despite the efforts of financial market regulatory agencies to crack down on unlicensed investment companies, their struggle seems endless. The Spanish CNMV has just reported that scammers are once again attempting to impersonate popular retail trading brands. Furthermore, the latest warning list includes entities operating in the country without proper licenses.
CNMV issues alerts against StoneX and IG Group clones
According to the latest news from the Spanish financial market regulatory agency CNMV today (Monday), the supervisory authority has added ten new entities to its warning list.
Among them, “Finance IG” which operates through the websites Finance-IG.com and financeig.com, is a clone of the popular London-based listed company IG Group, which is well-known throughout Europe and globally.
The warning list also includes clones, which refer to entities or individuals who use the detailed information of authorized companies in an attempt to persuade people that they are engaged in fraudulent activities within the company. This is a relatively new strategy where fraudsters use the name, “company registration number,” and address of a regulator-approved company and individual to make it appear legitimate. Cloning seems to be a primitive technique, although newly adopted by scammers in the information age. As promoted by regulatory agencies, cloning refers to entities or individuals who use the detailed information of authorized companies in an attempt to persuade people that they are engaged in fraudulent activities within the company. This is a relatively new strategy where fraudsters use the name, “company registration number,” and address of a regulator-approved company and individual to make it appear legitimate. Cloning seems to be a primitive technique, although newly adopted by scammers in the information age. With the regulatory agency targeting StoneX, a US-based company, it reads the terms and conditions through the website stonexly.com/es.
Unfortunately, attempts to mimic popular brands are common. A few months ago, CNMV also warned a company not to impersonate the popular social trading platform eToro.
According to a survey by Finance Magnates and FXStreet, retail traders consider clones of brokers and signal providers to be the biggest threats in the industry. However, conversations with representatives of frequently cloned companies indicate that this practice is widespread, making it highly challenging to effectively prevent it.
Eight unauthorized entities and clones
In addition to the two clones flagged by CNMV, the update also includes information on eight entities operating in the Spanish market without proper authorization.
These entities include Fusionlot, TD Markets, Rumlenomic, AMI Solutions, Adent Capital, TCM Globals, and Trader Expertss:
CNMV explains, “According to CNMV’s records, these institutions are not registered with the corresponding registrar of the Committee and therefore are not authorized to provide investment services or other CNMV-supervised activities.”
This is another update to the Spanish regulatory agency’s warning list in the past month. In June, Finance Magnates reported that eight unregistered forex/CFD brokers were under review by CNMV.
Recently, CNMV has also been interested in Linq Capital, a company that offers leveraged trading. In financial trading, leverage is a loan provided by a broker, which enables traders to control a larger amount of capital with significantly less initial investment. Consequently, leverage allows traders to achieve greater investment returns compared to trading without any leverage. Traders attempt to profit from fluctuations in financial markets such as stocks and currencies. Trading without any leverage significantly reduces potential returns, so traders read terms as high as 1000:1. The company claims to be registered in the UK, a city that does not actually exist. Several months ago, the German Federal Financial Supervisory Authority also drew attention to its suspicious activities.
