Kenyan Regulator Warns Against FX Scams

The central bank said brokers have been targeting Kenyans via social media and mass emails

In the past couple of years, retail brokers have been expanding their set of operations in Africa. With the European market already saturated, these firms are looking for new sets of customers in the continent’s emerging markets.

But, in the least surprising piece of news you’ll read today, there are also some scammers accompanying those brokers on their journey to the Land of Ham.

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Moreover, on Friday, the Kenyan financial regulator warned the public against trading with unregulated entities.

“[Kenyans] should only deal with genuine and licenced [sic] financial institutions and entities,” said the Central Bank of Kenya (CBK) in a statement.

“Members of the public are therefore advised to confirm the licencing status of forex dealers from the CBK website…before engaging with the dealers, as they risk being defrauded and losing their money to unlicenced [sic] and unregulated forex dealers.”

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Apps and emails

The regulator added that these unregulated brokers are advertising their services through social media websites and mass emails.

On top of this, the Kenyan financial watchdog said that brokers are encouraging traders to access their services through applications.

As it’s rare for scam brokers to have proprietary software, this could mean that some of the ‘unregulated’ brokers that the CBK is discussing just aren’t based in Kenya. By way of comparison, there are many European-regulated brokers targeting Nigeria that don’t have a license from local authorities in the country.

Despite other ‘review’ websites’ claims to the contrary, there are some regulations in place that govern the retail trading industry in Kenya.

Equiti Group, for instance, received a license from local regulators in mid-2018 and launched a broker, EGM Securities, shortly afterward.

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