Austrian financial supervisory authority (FMA) today issued another public warning, this time against the unauthorized activities of Krisimark Ltd, an FX broker that claims to be based in Bulgaria and has been offering financial products in the country without authorization.
Krisimark operates a retail FX and CFDs brand called Starkmarkets, which advertises the registration number 206066758 for a company it says duly incorporated in the Republic of Bulgaria. However, the FMA said this provider is not entitled to provide investment advice or trading services into financial instruments under local laws.
The regulator has recently identified a large number of unregulated entities that were classified as boiler room scams, a type of fraud that involves the contacting of customers in an unsolicited manner and making offers on rather obscure shares or exotic financial products.
The watchdog also advises against deposits and the transfer of money to these entities, given the inherent risk involved. While have centered on forex firms in years past, a large majority of unregulated entities have recently been cryptocurrency providers.
In its capacity to supervise the financial market and enforcing compliance with rules and regulations, the of Austria will impose a maximum fine of €200,000 on cryptoasset-related businesses that fail to register with the country’s regulator.
But while its recent warning did not seek to explain the merits of the virtual asset class and the reasons behind why it’s seeing adoption, the regulator highlighted the potential for their misuse.
Instead, the on addressing the increasing number of business models and investment schemes that use digital currencies.
The FMA is focused on identifying and blacklisting any individual or entity that is operating in Austria without a license or authorization where that is required by law. However, the FMA has warned that some companies are overseas operations and the watchdog may only be alerted to them once a local investor has a problem with them.
The FMA uses investor warnings to inform the public about fraudulent operations, unauthorized service providers, and possible scams. The system is not unlike measures deployed in other jurisdictions, such as routine warnings from the UK’s Financial Conduct Authority (FCA), or Belgium’s FSMA. The recent data supports this measure as an effective counter against scams, with the public being more informed overall and properly warned against unauthorized service providers preying on market participants.