Clone of FX broker OANDA draws CySEC attention
The Cyprus Securities and Exchange Commission today issued yet another warning to investors about the risks associated with unauthorized investment providers. These warnings are typically aimed at protecting consumers from fraud, scams, and other forms of misconduct by unregulated or improperly regulated brokers.
The most recent addition to the CySEC’s caution list is a new clone scam impersonating one of the brands operating under FX brokerage firm OANDA. The clone website operates through primusforex.net. The copycat broker has chosen to operate under the brand ‘PrimusForex,’ and it mimics the website of TMS Brokers. In 2020, OANDA acquired the Polish broker to its business grow across the Baltic countries. Established in 1997, TMS was the oldest and second-largest local Polish brokerage and is regulated under the KNF, giving the business access to markets in the European Union.
OANDA is a multi-regulated broker with offices in Toronto, Europe and the Asia Pacific region. The company operates an FX trading platform utilized by a mix of retail and institutional investors. Moreover, it provides currency information services to individuals, large corporations and portfolio managers.
CySEC stresses that these firms are not licensed to operate a brokerage business in Cyprus, nor are they affiliated with a regulated entity. Additionally, it warns that if consumers lose their money on platforms that are not licensed, they are not protected under the Investor Compensation Fund (ICF). This serves to protect the claims of covered clients and provide them with compensation in case a member was unable to meet its financial obligations.
CySEC and other global regulators have repeatedly issued alerts warning investors about clone scams. These alerts advise investors to be wary of unsolicited emails or social media messages that claim to be from a legitimate financial institution or regulator, and to carefully review the website address and contact information of any financial institution or regulator they interact with online.
However, the regulator said it is important for investors to do their own research and due diligence before investing with any broker. This includes verifying the broker’s regulatory status, reading reviews and feedback from other investors.
CySEC surveyed 200 European retail investors aged between 18 and 55 who directly traded in securities or derivatives at least once in November 2022.
The research showed that too few spend enough time researching the products they plan to invest in or the firm selling them, raising concerns that investors did not understand the relevant risks. Of the retail crowd, a quarter revealed that they spent 6-7 days researching a particular product, 7% said they did less than 30 minutes due diligence or none at all before committing their money to a product.
