FCA Warns Public that Bit Management is not Authorised

The United Kingdom financial markets watchdog, the Financial Conduct Authority (FCA), today warned that it believes a UK-based company under the name Bit Management Ltd has been providing financial services or products without regulatory permissions, according to a FCA statement.

Almost all firms and individuals offering, promoting or selling financial services or products in the UK have to be authorised by the FCA.

The address details of the suspicious company are: 33 Throgmorton Street, 6th Floor, London EC2 N2BR, and it can be found under the web address www.bit-invest.com.

A visit to the aforementioned website reveals that it is just a HYIP program, a type of Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors' money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of "high-yield investment programs", "offshore investment", or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities. A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors' money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and promise above average returns. This also includes purposely vague or arbitrary terminology to help confuse more novice investors. This fraud is riddled with mentions of "high-yield investment programs", "offshore investment", or “guaranteed returns”.Any sort of investment opportunity should always be analyzed and researched. In the modern era, many tools are available to identify scams or fraudulent operations.Regulators in most jurisdictions are constantly policing against these forms of market abuse and it is important to check these registers before actually investing in dubious opportunities. Read this Term. High-Yield Yield A yield is defined as the earnings generated by an investment or security over a particular time period. This is in typically displayed in percentage terms and is in the form of interest or dividends received from it.Yields do not include the price variations, which differentiates it from the total return. As such, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as an internal rate of return, which may also be used to indicate the owner's total return, or portion of income, etc.Understanding Yields in FinanceAt any point in time, all financial instruments compete with each other in a given marketplace. Analyzing yields is simply one metric and reflects a singular part of the total return of holding a security. For example, a higher yield allows the owner to recoup his investment sooner, and thus mitigates risk. Conversely, a high yield may have resulted from a falling market value for the security as a result of higher risk. Yield levels are also dictated by expectations of inflation. Indeed, fears of higher levels of inflation in the future suggest that investors would ask for high yield or a lower price versus the coupon today.The maturity of the instrument is also one of the elements that determines risk. The relationship between yields and the maturity of instruments of similar credit worthiness, is described by the yield curve. Overall, long dated instruments typically have a higher yield than short dated instruments.The yield of a debt instrument is typically linked to the credit worthiness and default probability of the issuer. Consequently, the more the default risk, the higher the yield would be in most of the cases since issuers need to offer investors some compensation for the risk. A yield is defined as the earnings generated by an investment or security over a particular time period. This is in typically displayed in percentage terms and is in the form of interest or dividends received from it.Yields do not include the price variations, which differentiates it from the total return. As such, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as an internal rate of return, which may also be used to indicate the owner's total return, or portion of income, etc.Understanding Yields in FinanceAt any point in time, all financial instruments compete with each other in a given marketplace. Analyzing yields is simply one metric and reflects a singular part of the total return of holding a security. For example, a higher yield allows the owner to recoup his investment sooner, and thus mitigates risk. Conversely, a high yield may have resulted from a falling market value for the security as a result of higher risk. Yield levels are also dictated by expectations of inflation. Indeed, fears of higher levels of inflation in the future suggest that investors would ask for high yield or a lower price versus the coupon today.The maturity of the instrument is also one of the elements that determines risk. The relationship between yields and the maturity of instruments of similar credit worthiness, is described by the yield curve. Overall, long dated instruments typically have a higher yield than short dated instruments.The yield of a debt instrument is typically linked to the credit worthiness and default probability of the issuer. Consequently, the more the default risk, the higher the yield would be in most of the cases since issuers need to offer investors some compensation for the risk. Read this Term Investment Programs, or HYIP, are fraudulent investments that purport to deliver extraordinarily high returns on investment. As is the case with other Ponzi schemes, they pay previous investors with the money invested by new investors. Most of these scams work from anonymous offshore bases which make them hard to track down.

The FCA stated in its official statement that it strongly advises investors to only deal with financial firms that are authorised, and check the Financial Services Register to ensure they are. It also noted that you should be aware that if you give money to an unauthorised firm, you will not be covered by the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.

Last time Finance Magnates reported on the British watchdog was yesterday when senior MPs called for a review on breaking up the FCA because of its inadequate response to the near collapse of British lender HBOS in 2008.