The City watchdog has sounded an alarm over yet another fraudulent firm, but this time is shedding light on a mix of cryptocurrency and binary options scams. The FCA, as part of its intensified market supervision, said on Friday that a company called Pro-Options is an unlicensed trading provider, cautioning all retail investors about the risks of dealing with it.
Pro-Options website claims to offer Bitcoin and binaries investment plans, with returns ranging from 50 percent to 100 percent after 24 to 48 hours, which raises a red flag as far as investors are concerned.
As one would expect, sites such as Pro-Options operate as a High Yield Investment Program (HYIP) scheme where returns are always questionable, though they tend to dry up long before the original investment amount is repaid. The company provides no legitimate proof of payouts, and it is likely no one will ever see any money.
A glance at the website in question also reveals that the exchange does not confirm licenses held in any jurisdictions either.
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FCA investigates 87 crypto companies
The FCA has recently lift scrutiny of the market, especially around the provision of complex products to retail customers. The regulator has particular concerns with the provision of margin trading products by some online platforms to retail customers without proper licenses.
Crypto market players have also been put on notice with the UK’s financial regulatory body currently has ongoing investigations into 87 companies with respect to the cryptocurrency business. The FCA is concerned about risks to UK investors and thus has upped its inquiries into UK-based companies by over 74 percent compared to 2018, with many still ongoing. This number includes early-stage scrutiny as well as full-blown enforcement investigations.
The FCA would not confirm the names of the 87 companies being probed. However, it has previously revealed the number of cryptocurrency and foreign exchange scams more than tripled. The City watchdog said that victims lost more than £27 million to over 1,800 crypto and forex investment scams in 2018-19.
According to the FCA, crypto fraudsters were increasingly using social media to promote their schemes, often using fake celebrity endorsements and images of expensive cars and watches to persuade victims.