This Monday saw another warning issued by a financial regulator against companies that sell or trade in forex related products, as well as contracts for differences and crypto coins. That regulator is Belgium’s own Financial Services and Markets Authority (FSMA).
FSMA highlighted that a big portion of these products and assets are sold via multi-level marketing schemes. This is a popular structure, much like the Ponzi scheme, where users are incentivized to encourage more users on the platform, which in turn are pushed to do the same, etc.
The regulator did not label these as fraudulent, it wishes users to note that ‘a great many cases of fraud have also been found to use these instruments’.
The most popular places where these schemes are marketed in are the social media platforms. There, ads of get rich fast schemes are a daily nuisance for the average internet user or office worker. Many of these advertisements showcase luxury lifestyles and zero concern for the financial future. As is expected, the target audience for these are young people.
The watchdog commented,
“The message is that everyone can afford this kind of lifestyle if they bring in enough new members and make the right investment in the software being promoted,”
Other EU regulators, as well as international ones, are constantly warning users of so called influencer accounts .
FSMA noted that, from a survey by other EU overseers, 75% to 89% of investments in assets end up in losses.