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Belgium Regulator Blacklists 21 Crypto Firms Suspecting Fraud

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The Financial Services and Markets Authority (FSMA) has added 21 new websites of suspected cryptocurrency scams to its blacklist.

Belgium’s financial regulator published the list on its official website, bringing their tally of suspected crypto scams in the country to 99. The agency found that despite their prior warnings concerning the risks associated with crypto investments, Belgium is witnessing a growth in online fraud cases. Among the blacklisted companies, many are offering financial services without complying with the Belgian financial legislation. Moreover, the listed firms are also involved in attracting victims to their allegedly fake investment schemes.

The FSMA blacklist also names websites that reach out to the victims of earlier crypto frauds. These persons running these websites pose themselves as financial advisors, lawyers, and accountants. They promise victims that they would arrange compensation or to recover their losses in exchange for a fee. The financial contribution by the victim, however, does not result into anything substantial. The FSMA refer these scam websites as ‘Recovery Rooms.’

Outside Belgium Jurisdiction

The blacklisted firms cannot be charged in Belgium for falling outside the jurisdiction of FSMA, the details revealed. Agence Des Analystes Financiers, for instance, is one of the denounced companies in the list but is reportedly based in Germany. Another firm BK-COIN appears to have offices in cities all across the world, including London, Tokyo, Meyrin, and Paris, the validity of which remains unconfirmed.

Similarly, firms mentioned in the FSMA blacklist are appearing to operate from all around the globe but Belgium.

Nevertheless, the agency has requested investors always to verify the companies with the concerned regulatory agencies. The advisory specified that FSMA couldn’t charge websites active in the cryptocurrency space in the absence of legal supervision, but an alert could still minimize the risks.

“Be wary as well of companies that claim to hold authorizations from supervisory authorities and refer you to such authorizations,” the regulator wrote. “This is a very frequently used technique. However, these are often cases of identity theft. Feel free to ask the FSMA to confirm the information you have received.”

Identifying a Swindler

The FSMA advisory laid out the typical characteristics of an online crypto scam. The regulator said that swindlers usually contact victims by phone in a process called cold calling. They try to offer them a variety of investment options claiming they could yield maximum profits in a minimum span. They attempt to influence a victim into purchasing security tokens of a newly-launched blockchain product or participate in a multi-marketing scheme by investing cryptocurrencies. Regardless of the type of marketing pitch, the promises of a scammer include:

  1. high monthly or annual returns
  2. high liquidity (users can withdraw funds anytime they want)
  3. investments are protected by real-world collateral (it won’t fall below the value at which investments were made, even during a market crash)

“All these promises are worthless, however: if an offer is fraudulent, the promises that accompany it are equally so,” the FSMA added.

Readers can find the FSMA crypto blacklist here.

Featured image from Shutterstock.

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