Russian self-regulatory organization, CRFIN, has issued two press releases outlining that it has added both companies to its blacklist for allegedly misleading and promising unrealistic returns to depositors.
According to the Russian private Forex regulatory body, Royal Smart Group (www.royalsmartgroup.ru) has been promising unrealistic returns totaling 7.8 to 10.3% weekly without any impending risk to the customer, while Forex MMCIS Group (www.forex-mmcis.com, www.mmcis.ru, www.forex-mmcis.ru, www.ru.forex-mmcis.com) has been promoting to prospective investors an average of 10% monthly returns allegedly generated by the company’s Forex trading desk.
CRFIN has stated that both companies have been marketing to give out bonus payments to customers for bringing in new clients who are willing to deposit. In the case of MMCIS, the payments are allegedly happening on a multi-level marketing basis, while RMS claims to be giving out 3% of the deposited funds to the referral customer.
EuropeFX Partners with Acuity for AI-Powered News Sentiment AnalysisGo to article >>
Both press releases have stated that there are no objective warranties for the companies to be handing funds back to their investors, with the business model allegedly not being transparent enough to prove that winnings are distributed to customers in any other way than from transferring funds from existing investors.
In addition, according to CRFIN, the Russian law does not permit the use of a phrase such as “managed funds” for marketing, which both companies have used, and information about their licensed services for managing funds is missing from all mentioned websites.
The latest developments surrounding the official Forex regulation bill of brokers in Russia have not been promising, and at this point in time there is not much likelihood that we are going to see a new law addressing FX trading in Russia until the end of the year.