Scam projects in Ukraine: regulator tells how they are detected and how many are already on the list
Kyiv • UNN
The National Securities and Stock Market Commission reported more than 400 fraudulent schemes in Ukraine as of March 20. The commission keeps a list of such projects and urges citizens to be vigilant.
As of March 20, there are over 400 Scam projects in Ukraine - fraudulent schemes aimed at deceiving people and extorting their money or personal data. The National Securities and Stock Market Commission, in response to a request from UNN, reported how the list of Scam projects is maintained, what are the signs of fraudulent schemes, and how this issue is regulated by law.
Details
Scam projects are projects that lose user confidence and close down without fulfilling their obligations to investors. In business, this concept is associated with companies that violate the terms of cooperation and do not pay money to investors.
In Ukraine, the National Securities and Stock Market Commission is responsible for identifying such projects. It monitors the activities of dubious investment projects aimed at seizing the funds of Ukrainian citizens by providing an idea of investing in various financial assets and conducting activities without appropriate permits.
As UNN was informed in the Commission, the list of dubious investment projects is maintained within the powers clearly defined by the current legislation on state regulation of capital markets and organized commodity markets and aimed exclusively at protecting investors.
"The list is maintained as part of educational work on the protection of the rights of consumers of financial services, is advisory in nature and calls on citizens to be more careful in analyzing advertising promises of investment proposals and consultations," the NSSMC said.
Recently, the Commission made another important step aimed at implementing IOSCO standards into national legislation. From now on, the list of dubious investment projects identified in Ukraine is published on the official IOSCO website in the "Investor Alerts Portal" section. This step makes it possible to expand the boundaries of information security and protect potential investors around the world from possible financial fraud schemes.
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According to the NSSMC, the procedure for maintaining the list of dubious investment projects, the procedure for checking them for compliance with the signs of dubiousness and the list of signs of dubiousness of investment projects are approved by the relevant order, which approved "10 signs of dubiousness of an investment project":
1. Large percentage of guaranteed return.
The main sign of Scam projects is the offer of super-profits, which are often many times higher than the average interest rate of banks on deposits. Some projects offer a return of 100% or more per annum, while the algorithm for using money and the logic of earning are extremely vaguely described.
2. Lack of relevant permits and licenses.
As a rule, the project does not have any official regulatory permits and licenses to carry out activities related to the provision of financial services, asset management or other services in the capital markets in the country where it raises money. Sometimes the investor is presented with "licenses" from foreign dubious organizations or exotic countries.
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3. Aggressive marketing.
Most Scam projects require aggressive advertising support. As a rule, advertising campaigns are implemented on the Internet. Large-scale, bright, promising, it is usually based exclusively on emotional motives, rather than rational arguments. You should not be reassured by a large number of positive reviews on the company's website, recommendations from famous bloggers and media personalities, or even a network of related "partner" sites in other jurisdictions.
4. Lack of physical office.
The presence of exclusively online communication, the absence of a physical office in the city or country where the project offers services. Lack of identified employees with a professional history who are responsible for managing investors' funds. Conclusion of agreements without physical presence, personal or electronic signature and verification of documents. Lack of a functional back office, such as a legal department, accounting department, related services.
5. No registration in the country of investment.
Lack of legal registration of a person or project in the country of investment. Contact legal entities and beneficiaries, as a rule, are residents of countries such as the Seychelles, the UAE, the British Virgin Islands, Saint Vincent and the Grenadines, the Republic of Vanuatu, countries with offshore zones, preferential customs or registration conditions.
6. No investor accreditation.
As a rule, there is no verification of the investor's financial condition or credit history. The projects are not interested in the investor's financial capabilities, his resources, they are ready to work even with low-income clients, offering them loans on predatory terms.
7. Suspicious or unverified biographies of managers.
Secrecy of information about the actual managers of the project, about those responsible for legal, financial, accounting support of the project's activities. Vague and legally unclear titles of nominal managers who appear in advertising materials. Lack of confirmed professional history of such persons. The presence of facts or implemented projects that cannot be confirmed from the previous activities of top managers. Public figures who may be presented as managers of such projects may actually be hired actors and not be involved in the management process in any way.
8. Lack of signed documents.
According to Ukrainian law, the conclusion of financial agreements requires the personalization of signatories, personal signing of papers, the presence of such physically signed documents by both parties to the agreement in several copies or signed with an electronic digital signature.
9. Persistent offer to attract friends.
The offer to the investor to involve friends, relatives, acquaintances in investments is a common practice of scam projects. Dubious projects develop and offer a detailed program for receiving additional bonuses and income if the investor attracts new people to the project, for example, by connecting through his referral key.
10. Concealing ownership.
Lack of any documents that can confirm the ownership of a person to assets or their share, in which the scam project theoretically invests. Lack of systematic reports on operations, activities, results in the management of the investor's assets by the project.
Recently, the National Commission included 5 more cases in the list of unreliable investment projects. The list was supplemented with the following dubious projects:
- Turf Capital Private LTD;
- OptCrypt;
- INVESTMENT TRAINING PROJECT FinUp;
- Euoptrade;
- Fxplag.
As reported in the Commission, as of March 20, there are 419 dubious investment projects on the list.
