CySEC’s website, officials impersonated in fraudulent scam

The Cyprus Security and Exchange Commission today said it has spotted a scam where fraudsters claiming to be CySEC’s officers or appointed representatives are soliciting investors for fees in exchange for settlement of fake compensation claims.

The contact often takes place via e-mail, says CySEC, and gives the illusion of an authentic message that contains a promise to help traders get compensation for the potential damage they may have suffered as a result of fraud by regulated forex / CFD brokers.

On top of that, the commission said that a few clone websites are impersonating the organization in many areas and context.

The fake websites are:

  1. a)
  2. b)
  3. c)
  4. d)
  5. e)

‘Clone firm’ scams have increased in recent years, including those targeting Cypriot brokers, as fraudsters have become more sophisticated in their ways. Often times, the scam works by setting up a clone website to look exactly like the genuine website they are copying.

Scammers often acquires real material available online, edit the content and mix genuine details with fraudulent details to make themselves look legitimate.

The Cyprus financial watchdog warned in July that there was evidence of fraudulent impersonation of its officials who are engaged with firms under CySEC’s supervision.

The regulator cautioned the public about persons who approach clients of suspended brands, or those under investigation, claiming that they can help them recover their capital.

Per a regulatory circular, sophisticated campaigns targeting investors of online trading firms are used as part of the scam which typically involves:

  • Fraudsters claim to be CySEC officers, appointed representatives of CySEC, such as legal advisors, other Cypriot supervisory authorities or other real or fake bodies.
  • The scammers contact clients of CySEC regulated entities, often via emails and sometimes by telephone, which appear genuine and include the name, address, official stamp and logo of CySEC, fraudulently copying CySEC officials’ signatures.
  •  The fraudsters make false offers to assist investors with compensation claims for dealings they may have had with sanctioned firms – typically online trading firms offering speculative investment products.
  •  Through these preliminary contacts, the fraudsters illegally obtain additional personal information

Under current laws, CySEC has no powers to force internet companies to refuse financial advertisements or block access to their domains. It can only ask them to take down fraudulent promotions once they have been spotted. As a result, fraudsters and promoters of high-risk schemes have been able to place advertisements claiming to be based or licensed in Cyprus.