Financial scams are everywhere. A quick look at the warning page of your local regulator will clearly showcase this to you. This week, however, it is Nadex, a US-based online binary options exchange, that has published a warning on its website against a suspected scam, Nadex Investment Team.
According to the notice on its website, Nadex has been alerted to Nadex Investment Team, who is claiming to be affiliated with Nadex. However, the retail-focused exchange has stated clearly that this is not true.
Specifically, the Nadex Investment Team is both soliciting and accepting funds via multiple social media platforms, to allegedly trade on behalf of these clients on Nadex, the statement said.
Nadex Investment Team has no affiliation with Nadex
The warning from the company states: “Be advised that Nadex is not affiliated in any way with the Nadex Investment Team. Nadex Investment Team has not been granted permission to use the Nadex name or logo and is doing so in violation of Nadex’s intellectual property rights. Nadex does not employ, nor does it have any affiliation with, individuals or entities that may enter transactions on behalf of another person on the Exchange.”
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Because the Nadex Investment Team is claiming to be associated with the exchange when this is not true, the entity is most likely a clone firm. Clone firms, as the name suggests, is when a company clones details of an authorized entity to appear legitimate. Sometimes, as is the case with the Nadex Investment Team, the clone firm will copy the name, logo or website to create a false perception of affiliation with a legitimate company.
In other instances, the cloning is less noticeable. The fraudsters might only copy an address or, in order to look authentic, copy the financial license number or authorization details of another firm.
Thanks to the internet, these financial scams are becoming more and more sophisticated and what once would have been an obvious scam is now harder to identify. As Nadex highlights, “it is in your best interest to conduct proper due diligence and research prior to investing your funds with any person or company.”
For Nadex specifically, the exchange outlines that any company that is actually affiliated with Nadex must first be registered with the Commodity Futures Trading Commission (CFTC) unless they are exempt.
You can find out whether a company is exempt from CFTC registration here.