The UK’s financial regulator, the Financial Conduct Authority (FCA), recently warned consumers about the false claims made by a digital asset trading platform called GMT Crypto.
"Cloning" Established Financial Firm
According to the FCA, GMT Crypto is a “clone company” as it is trying to use fake documents that appear to show that it’s authorized by the regulator to offer crypto-related services. The FCA’s warning noted that the exchange is trying “to scam people in the UK.”
In order to legally provide financial services in the UK, the FCA requires that nearly all companies or individuals have the appropriate government-issued license to offer financial products and services. Notably, GMT Crypto is not authorized by the FCA and it has also not completed the mandatory registration process (for all financial service providers).
Moreover, GMT Crypto is reportedly misleading investors by claiming its offices are located at the FCA-registered address of established UK-based investment company, GMT Communications Partners. The company reference number currently being used by GMT Crypto is the same as the one under which GMT Communications Partners has registered their business. However, there is no affiliation, or association, between the two companies - the FCA’s report warned.
To help report the exploitative activity, the actual FCA-licensed firm, GMT Communications, published a notice on its official website in which it warned consumers about GMT Crypto’s fraudulent scheme.
GMT Communications Partners stated that it had never made phone calls to investors, and had not tried to contact its customers via email - in order to sell its products or services. The UK-registered investment firm also clarified that it had not asked for personal information from its clients.
The company’s notice reads:
GMT Communications Partners LLP is aware that there has been an increase across the United Kingdom financial services industry of fraudsters using the names of legitimate authorized firms, including imitation of literature and branding.
GMT Communications Partners’ warning message continued:
You need to be aware that if you invest with a fake unauthorized company, you will lose the protection of the Financial Ombudsman Service and the Financial Services Compensation Scheme.
Potentially Fraudulent Crypto Website Still Working
At press time, the fraudulent website created by GMT Crypto has still not been taken offline. In an attempt to look like a legitimate crypto firm, the website’s owners have copied disclaimers and other standard information found on financial sites.
GMT Crypto’s website claims to offer trading in more than two hundred different trading pairs including bitcoin (BTC), ether (ETH), ripple (XRP), zcash (ZEC), and litecoin (LTC). The company also stated that it adheres to all know-your-customer (KYC) / anti-money laundering (AML) requirements.