Belgian Regulators Update List of Fraudulent Crypto Projects

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In Brief
  • Scammers mushroom as investors look for easy money.

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The Trust Project is an international consortium of news organizations building standards of transparency.

Belgian financial regulator Financial Services Market Authority (FSMA) updated its list of suspicious websites engaged in cryptocurrency trading.

Now, the blacklist of European watchdog contains 99 potentially scammy projects that should probably be avoided.

The regulator also urges citizens to be extremely careful when someone approaches them with a lucrative offer. It is always wise to do due diligence and investigate the company before making an investment decision — as fraudsters can be very ingenious in creating an illusion of a legitimate business.

An example of this can be found with the case of SKEN — a copycat ICO that we detailed here.

Red Flags

While swindlers use different techniques to defraud the unsuspecting public of their money, the key ingredients of a fraudulent cocktail are pretty simple:

  • A rate of return that is too good to be true. Scammers are happy to offer 8 percent or 10 percent or 15 percent per month because they are not going to pay them.
  • Easy money withdrawal. This promise lulls potential victims into a false sense of security. They believe that they will take their money back any time they need it, but the reality is quite the opposite.
  • 100 percent guarantee on initial investment. This promise gives the impression that your money is safe even if the market goes against you, which will almost never happen in real life.

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

High risks

According to FSMA, all blacklisted companies are based outside of Belgium. Some of them even claim they are authorized by supervisory authorities, which is not true. The regulator recommends adopting a critical attitude and always double check all the information obtained from the company.

The agency also reminds investors that cryptocurrency exchanges and investment platforms often operate outside the regulatory framework, which heightens investment risks.

Recent events surrounding Canadian cryptocurrency trading platform MapleChange bring to the forefront the risks of so-called exit scam, as the team is suspected of running away with the customers’ money.

Have you ever been a victim to a cryptocurrency fraud? Do you know how to protect yourself and your money from scammers? Let us know in the comments below. 

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Financial translator, financial market observer, analyst and an editor with vast work experience in financial and cryptocurrency media outlets in Russia and abroad. For over ten years worked as a financial translator and content creator for Russian and international financial companies and media outlets, including Profinance Service, Saxo Bank, and Finance Magnates. Writing about cryptocurrency and blockchain industry on a daily basis since 2017. Love to stay on top of things and have a personal opinion about everything, but always try to follow the principles of objective reporting.

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