“Scammers Are Stealing Business from Companies”: FXStreet’s Co-CEO

“Scams are a big problem in the industry,” Pere Monguió Montells, FXStreet’s Co-CEO, told Finance Magnates at the iFX EXPO International, adding that scams are not only “stealing business from companies but also hurting traders.”

FXStreet has launched a campaign to fight scams. The platform's primary goal is to raise awareness within the industry about various types of scams and frauds. It even collaborated with Finance Magnates earlier to launch an industry-wide survey to gauge the reach of such scams.

Highlighting the campaign's purpose, Montells said it is important to “help traders protect themselves and let them know what to expect from us and what they shouldn't expect from us,” adding that “messages are important to help them prevent being scammed.”

“Regulators Are the Most Fragile”

Further explaining to the responsible parties how to prevent scams, he pointed out that “there are three layers.”

“The first layer, probably the most important one, is at the trader level,” he added. “Traders should be aware of this problem and should protect themselves. And if you are careless as a trader, there is nothing anyone else can do to help you.”

“Then there are brands, including brokers or any others, that convey trust and will probably be exploited by bad actors,” he said, adding: “Brands should explain to their followers what they do and what they never do. For example, at FXStreet, we do not manage third-party funds and do not accept money from traders for trading purposes—that's something very important for our users to know. If someone reaches out to them asking for a transfer, they should be aware that it's definitely a scam.”

Finally, there are regulators, who, according to Montells, are “the most fragile right now.”

“All these scams are not happening on the brokerage web pages or the official platforms,” he pointed out. “It's happening on 3rd party platforms, like social media, WhatsApp, Discord, Telegram. So these players should address this problem because if you have built a platform and it's being used for scams, it's part of your responsibility as well to address this. That’s where I think regulators could help the most: helping the industry address this problem at the platform level.”

Brokers Do Not Want to Talk “About the Struggles”

It is to be pointed out that many regulators actively publish lists of fraudulent domains or scams that target traders. While most of the regulators in the United Kingdom, Cyprus, Spain, and New Zealand only alert the public about fraudsters, the one in Italy goes a step further in blocking the website domain. However, none of them act against the rampant scams on 3rd party platforms like social media.

Interestingly, some brokers also take proactive actions to alert their existing and potential customer base about their clones. But such brokers are only a few.

Highlighting the lack of most brokers’ efforts to flag the clones, Montells said that “it's a problem”, adding that it is because “it doesn't look good.”

“It's not something they are happy to talk about,” he continued. “They prefer to talk about a new feature or how good they are, but not about the struggles they are having. We need to realise that this is a common problem and we need to address it, probably together, as this is not a single broker’s problem. This is our problem as a group, and I think we should rally together and tackle this challenge together.”