Belgium’s Financial Services and Markets Authority (FSMA) issued a warning on Monday against the companies selling, trading and training products related to forex, contract for differences (CFDs), and cryptocurrencies.

The market regulator highlighted that most of these products are sold using the so-called multi-level marketing (MLM) structure, meaning the customers get incentives for onboarding more users on the platforms.

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“…offers of CFDs and forex via the internet are very risky and vulnerable to fraud,” FSMA noted. “The possibility of loss is much higher than the possibility of gain.”

The market watchdog additionally cited a survey by other European supervisors that shows that 75 percent to 89 percent of the investments in derivative products result in losses.

Most of these products are marketed through social media and advertised as some get rich quick schemes by influencers showing off their luxury lifestyles. The FSMA pointed out that most young people fall for these schemes.

“The message is that everyone can afford this kind of lifestyle if they bring in enough new members and make the right investment in the software being promoted,” the regulator noted.

Regulators Getting Cautious

Indeed, regulators across Europe are actively flagging influencer accounts bragging about profits from the forex and other tradings.

Though the Belgian watchdog did not call all these schemes as fraudulent, it stressed that ‘a great many cases of fraud have also been found to use these instruments’.

Meanwhile, the FSMA is maintaining a list of flagged platforms that it considers suspicious. In June, the regulator warned against three boiler room scams that are illegally offering services in Belgium, Finance Magnates reported.

Furthermore, the watchdog is considering to develop regulations for ‘the sale, purchase, and use of virtual currencies and all related financial products’ as these are becoming the center of cybercrimes.