U.S. regulators are warning about unregistered trading scams targeting victims that are suffering due to the economic fallout from the Covid-19 pandemic.
The U.S. Commodity Futures Trading Commission (CFTC) issued an advisory warning about scams that promise unrealistic profits from trading in unregistered instruments, such as crypto and binary options, and then charge high fees to access the supposed profits.
“These frauds typically involve unregistered brokers selling binary options, foreign exchange (forex) programs, and cryptocurrencies. The brokers primarily use social media and messaging apps to target people who have lost their jobs and are looking for replacement income,” the CFTC said.
The advisory warned that it is easy to fake trading success on social media and listed red flags to help investors identify possible frauds.
“Trading forex, binary options, and digital assets is highly risky,” the CFTC said.
“In fee scams, the earnings are never real. The fraudster’s goal is to get investors to pay the upfront deposit and later pay ridiculously high commissions, taxes, and fees.”
The CFTC said that it has received hundreds of complaints about these sorts frauds recently. The perpetrators are now targeting people who have lost their jobs or are working from home because of the pandemic.