Business 8 August 2018

Dennis Wafula

FCA warns UK investors against ‘clone’ crypto companies

The UK Financial Conduct Authority (FCA) has issued a warning against a clone company called Fair Oaks Crypto. According to the financial regulator, the “clone firm” has been impersonating FCA-authorized firm Fair Oaks Capital Limited to lure investors to its site.

The announcement stated that Fair Oaks Crypto is not registered with the FCA. The “clone company” has been using information from Fair Oaks Capital’s previous address, which is displayed on its website. FCA stated that the company has no legal rights to operate in the United Kingdom.

“Almost all firms and individuals carrying out financial services activities in the UK have to be authorised or registered by us. This firm is not authorised or registered by us but has been targeting people in the UK, claiming to be an authorised firm,” according to the FCA.

On its website, Fair Oaks Crypto described itself as the world’s largest cryptocurrency trading platform, offering services for clients trading BTC, LTC, as well as precious metals and energy.

However, FCA said Fair Oaks Crypto is actually a “clone firm,” which is a fraudulent tactic of using the name of a genuine firm and its firm reference number (FRN) to scam people in the UK.

Fair Oak Capital has also warned its investors and other people who might have been contacted by the clone company, saying they do not acknowledge the clone company. They further added that the company was not part of the Fair Oak community.

FCA has asked investors to be vigilant when investing in any company, noting that they should check first if the company is in the Financial Services Register or the Interim Permission Register. In the event that one finds a clone company, they should report the company to the FCA to stop the fraudulent activities and bring the criminals to justice.

Fraudulent companies in the cryptocurrency industry have become increasable rampant. Fraudsters are constantly coming up with ingenious ways to swindle investors off their money.

Earlier this year, FCA launched a cryptocurrency task force in collaboration with the Bank of England to examine the various ways cryptocurrency technologies can be supported and regulated by the authorities. In May, FCA opened investigations on 24 cryptocurrencies to determine whether the exchanges require FCA authorization. FCA, though it does not consider cryptocurrencies as regulated assets, has taken an initiative to create Global Financial Innovations Network (GFIN) to help build the relationship between regulators and blockchain related companies.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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