FSA warns against unlicensed online platforms

18/03/2025 06:23 AST

As part of the Financial Services Authority's (FSA) ongoing efforts to protect investors and ensure a safe investment environment, the FSA has warned individuals and institutions against engaging with unlicensed online platforms that promote their services via the internet and social media.

These online platforms, according to FSA, aim to attract investors by offering services related to securities such as digital currencies, financial instruments linked to commodities like gold and crude oil, crowdfunding platforms, and the promotion of shares in companies listed on regional or global stock exchanges.

The FSA has highlighted that these platforms, despite their apparent credibility, carry significant risks that could lead to financial loss and expose investors' money to potential harm.

In a statement, Majid Ahmed al Abri, FSA spokesman, stated that these platforms often rely on alluring marketing strategies to attract investors, such as promises of high and quick returns, and offering tempting deals like discounted fees or free trades in the initial months. Some platforms also provide financial rewards to new investors upon registration or when referring friends and acquaintances to join the platform.

He also pointed out that these platforms frequently promote fake success stories, where individuals claim to have made large profits, attempting to persuade others that they might miss out on a lucrative opportunity.

Abri stressed that public awareness is the first line of defence to prevent falling victim to these platforms. He therefore urged the public, including individuals and institutions, to exercise caution and resist the allure of false promises and tempting offers. He advised them to avoid dealing with any electronic platform involved in securities-related activities unless it is licensed by the FSA. He also emphasised that unlicensed platforms do not provide legal protection for investors, leaving their money exposed to risks.

Furthermore, Abri stated that these platforms are often characterised by opaque financial operations, increasing the likelihood of illegal activities such as money laundering, which poses a threat to the country's financial and economic stability.

He added, "We call on everyone to be fully aware and verify the credibility of platforms before making any investment decisions."

The FSA recommends that anyone wishing to invest in activities related to securities via electronic platforms or companies ensures they are licensed and registered on the FSA's website or smartphone application, which allows them to view the list of authorised companies and entities permitted to conduct these activities.

The FSA reaffirmed its commitment to monitoring and addressing any irregularities in the financial market, taking appropriate legal actions to safeguard investors' rights and bolster confidence in the investment environment.

The authority encourages citizens and residents to report any suspicious platforms through its whistleblowing service, available on both its website and smartphone application. It stresses that collective cooperation and awareness are the best methods to combat these illegal activities and protect the national economy.

Muscat Daily