A massive crackdown in Europe has removed over 1,400 fraudulent online trading platforms that duped retail investors. German investigators, working alongside BaFin, Europol, and Bulgarian authorities, traced networks of fake brokers luring users into investing substantial sums with promises of high returns, Reuters reported.
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Sophisticated Online Scams Targeting Retail Investors
Users of the seized illegal domains were reportedly funneled to brokers working from overseas call centers. These brokers persuaded victims to invest large sums by promising high returns from trading forex, cryptocurrencies , and stocks.
According to officials, many victims only realized months later that their funds were never actually invested. Birgit Rodolphe, executive director at BaFin, highlighted how the perpetrators have ramped up their tactics using artificial intelligence. The fraudsters deploy AI to mass-produce fake websites that imitate genuine financial platforms, creating convincing traps for investors.
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This action followed an earlier shutdown in June 2025, which took down approximately 800 illicit domains. Since then, authorities recorded about 20 million attempts to access those blocked sites, underscoring the persistent nature of these fraud networks.
The new operation focused on disabling critical technical infrastructure and seizing digital assets where possible, significantly impairing the scammers’ capabilities.
Regulatory and Law Enforcement Challenges Persist
Online investment scams have surged alongside volatile markets, exploiting traders seeking quick profits. European regulators have faced growing pressure to address this trend by tightening oversight of online trading and digital asset platforms.
Authorities continue to investigate the individuals and entities behind these networks. Europol is leading cross-border data efforts to track the flow of funds, identify those operating call centers, and facilitate payments for scams.
Despite the large-scale takedown, recovery for victims remains uncertain. Many of the call centers are situated in jurisdictions with limited law enforcement cooperation, complicating restitution efforts.
Read more: BaFin Wants Brokers to Stress-Test Systems After April Trading Breakdown
BaFin has been keen in safeguarding against AI-related scams. Recently, the regulator issued a warning about a series of online platforms claiming to offer AI-driven trading of financial instruments. It highlighted that these websites operate without the necessary approvals and could present significant risks to investors.
BaFin identified at least 20 nearly identical websites that advertise AI-based trading services with minimum investments starting at 250 euros. According to the watchdog, none of these platforms provide verifiable information about their operators or legal disclosures, and none are supervised by BaFin.
Besides that, the regulator has cautioned against firms offering unlicensed investment services via WhatsApp groups. In the recent past the authority flagged the use of encrypted messaging apps to bypass regulatory oversight and reach retail investors.
