The Belgian Financial Services and Markets Authority (FSMA) recently issued a warning against 131 cryptocurrency websites that do not have adequate regulatory licenses in the country. The regulator is cracking down on unregulated online cryptocurrency scheme providers.
Non-compliance is a major problem
In recent years, a number of crypto companies have emerged in Belgium that attempt to offer users cryptocurrency-based investments. They operate their businesses online without adequate licensing or registration, and do not comply with the state's financial regulations. Most European regulators are skeptical of these entities and view the entire cryptocurrency industry as a threat to their financial stability.
According to FSMA, most fraudulent cryptocurrency schemes offer huge returns to customers and ask them to deposit funds. They promise little to no financial risk in these transactions to attract more customers, but eventually disappear or misappropriate the funds obtained. The regulator has received many complaints from investors who invested money in these schemes but eventually lost it. Many of them did not get their funds back and never heard from the company again.
Can regulators protect investors?
Although FSMA can warn investors to avoid trading with these fraudulent companies and issue warnings against them, it cannot provide the protections provided by securities laws. This is because the laws are for traditional securities and cannot be applied to any company that is not registered with the platform. The regulator also requires users to exercise caution and trade only on registered platforms.
The regulator has now identified 131 websites that are not properly authorized in the country. The most recently identified websites include: crypto-sfs.com, coinsmex.com, etc-markets.co, bitcoinmarketscap.com, bitcointraderspro.com, tdscapitalgroup.com, ltc-markets.com, stsroyal.com, and fisherih.com.
The most notable of these fraudulent websites identified by FSMA was operated by a company called Abesix Belgique. The company fraudulently claimed to be co-founded by Bernard Arnault, owner of Louis Vuitton and the third richest man in the world. A local business newspaper called De Tijd published a news article about Abesix, claiming it was linked to Arnault. The news article also mentioned that a young Brussels entrepreneur, Emmanuel Wouters, was also linked to the project. All of these claims were false.
However, the story helped to raise wider awareness of cryptocurrency-related fraud in the country. The European region has faced a growing number of such fraud schemes, which have caused investors to lose millions of funds.
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