Staff Writer
In its annual report this year, the U.S. Commodities Futures Trading Commission (CFTC) — the body which oversees the Forex market — released a report stating that over the last few years it has seen a steady increase in the number of foreign exchange scams around the globe.
A Forex scam is defined as any trading scheme used to defraud individual traders by convincing them that they can expect exceptionally high profits by trading on the Forex market.
“The U.S. Commodity Futures Trading Commission, which loosely regulates the foreign exchange market in the States, investigates such attempts to mislead,” said Gavriil Levi, general director of CMS Russia. “All the brokers registered in the U.S. are supervised by regulatory bodies and are subject to an obligatory audit of their promotional materials to eliminate scams.
“In Russia, though, the Forex market is not regulated by any governmental bodies, which leaves room for misleading information and even scams. When choosing a broker, an individual should carefully study their background and search for one regulated by governmental bodies with full operating licenses,” Levi said.
Although the Forex is perhaps the “most international” of global markets, controls on activities within Russia itself remain limited, with just one organization, KROUFR, providing oversight for the market and attempting to provide at least some regulation, although it can provide little support for those seeking redress in court.
Thus, experts say, advice given with regard to avoiding scams is much as the same as general advice on avoiding con artists. Firstly, stay away from opportunities that sound too good to be true, especially if vast profits are “guaranteed” with “no risk.” Secondly, unless you really understand what’s going on, don’t get involved — in this context that means that you shouldn’t trade on margins unless you genuinely understand them. And thirdly, be very wary of sending or transferring cash on the Internet or by mail.
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