The U. K.’s Financial Conduct Authority (FCA), one of the most important financial regulators in the country, has decided to warn the local investors against a new company called CFDPremium, which is targeting U. K.-based investors with offshore investments, including crypto.
According to the Britain regulator, this is a part of the ongoing effort in order to warn the public about the scams which are so common in the market.
CFDPremium is not a company based in the United Kingdom. It offers mostly crypto services such as Bitcoin and Litecoin investments, and also offshore investments for users. The warning was sent out because the company was deemed as fake by the regulators. According to them, CFDPremium is not authorized to offer its business in the country or to local investors.
Therefore, the company would represent a high risk for investors that could be speculative and make them lose their investments if they decided to give it a chance.
This is not the first company to try to offer CFDs to customers without being properly regulated. This kind of investment, unlike crypto, cannot be offered by companies which are not properly regulated by the countries in which they are offering their products.
For instance, the European Securities and Markets Authority (ESMA) has prohibited these companies from offering their products in all European countries without communicating with the authorities first and being completely compliant with all the local laws.
Another concern that the FCA currently has is that companies will use their overseas brands in order to sell products that can be fake or that are unregulated and will offer unexpected dangers for investors. Products like this can create several risks to the users and consumers, so they should be avoided.
In other occasions, the FCA has warned the local investors against any kind of “get rich quick” scheme such as these ones, because most of the time they are scams poorly disguised as real investments which will only take the money off the investors and vanish, which they can do because they work outside of the country and are, therefore, more likely to evade the law.
Another important problem is that most people see cryptos as shortcuts for getting quick money, which actually helps when some company uses them either as a way to escape sanctions or as a buzzword.
Finally, it was affirmed by the FCA that people should be aware that some companies affirm that they are regulated under the local law but they are not. In these cases, you should always check with the authorities before you invest.
Crypto Scams Are Most Profitable Than Most Altcoins
A new study made by Longhash showed that two popular crypto scams, Onecoin and Bitconnect, were actually more profitable than several altcoins. When comparing the market cap of these scams with tokens, both scams were featured in the top 10, using information from CoinMarketCap.
This is a certainly very worrisome scenario that shows just how important it is to stop these fake crypto offerings from reaching incautious investors.