CySEC Warns against Licensed Broker Clone

The Cyprus Securities and Exchange Commission (CySEC) published on Thursday a new warning regarding the activity of an unregulated cryptocurrency firm, IMS Crypto. According to the Cypriot regulator, the entity falsely claims to possess a CySEC trading license, using the details of the authorized company.

IMS Crypto on CySEC Warnings List

The ims-crypto.com website, which was placed on the warning list on 9 February 2023, falsely claims to be run by Initial Merit Secure Ltd. which, under the IMS Crypto brand, offers access to crypto managed investments, offering a monthly return of 15%.

Information on the website shows that the company is licensed by CySEC and registered as a Cyprus Investment Firm (CIF) under license number 219/14. According to the regulator's register, this CIF license actually belongs to Initial Merit Secure Ltd, but the entity uses the imsmarkets.com website address. IMS Markets offers trading to retail clients based on contracts for difference (CFDs).

"The Cyprus Securities and Exchange Commission ('CySEC') informs the investment public that the website below, does not belong to an entity registered to CySEC's register as Crypto Asset Service Provider, as provided by article 61E of the Prevention and Suppression of Money Laundering and Terrorist Financing Laws of 20071, as amended," CySEC wrote in its statement.

CySEC reminds retail investors to always check with the regulator's registry whether the trading company is registered as a cryptocurrency service provider or any other financial services provider before deciding to enter into a business relationship.

Just two weeks ago, the Cypriot regulator warned against another five unregulated CFDs platforms, including inforexeu.com, et-fx.com, nbimarkets.com and emporiumcapital.ltd. At the time of publishing its warning, only the inforexeu.com website was not responding, while the others continued to encourage investment.

CySEC Revokes Two Licenes in February

Although February barely started, CySEC has already cancelled the authorizations of two trading companies, F1Markets Ltd and FF Simple and Smart Trades Investment Services Ltd.

F1Markets operated multiple trading brands, including Investous. However, according to a notice on the F1Markets' website, the company closed its services last May. It closed all the open positions on 19 May 2022 and asked traders to withdraw their funds.

Last week, CySEC withdrew the operational license of FF Simple and Smart Trades Investment Services Ltd, operating at least two trading brands: TradoCenter and Toro Inveter. As in the previous case, the withdrawal came as the company itself decided to renounce its CIF license.

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One in Three Traders Trust Finfluencers, CySEC Study Finds

CySEC recently published the outcomes of a survey conducted amongst retail traders from Europe to review their decision-making process. According to the study, 31% of questioned investors rely on finance influencers (finfluencers), while 22% made investment decisions based on celebrity endorsements and digital promotions.

"Social media now has a direct influence on investment decisions, but not all the information can be trusted. Too many investors, including young people, are taking real risks with their money because they are taking advice and recommendations from unreliable sources," a CySEC spokesperson said.

The number of investors making decisions based on finfluencers varies by country of residence. Investors from France were the most likely to rely on social media (42%), followed by those from the UK (34%), while retail traders from Germany were the least likely (24%) to take investment advice from celebrities.