FX Trading Corp Ponzi Scheme Collapses Amid Regulatory Crackdowns Blames Exchanges For its Fall


FX Trading Corp was launched towards the end of 2018 and was a typical MLM kind of Ponzi scheme where it promised its investors a 500% return on investment of up to $50,000. The return promises were based on cryptocurrency arbitrage. The FX trading corp mentioned that they were based out in South Korea, however, their primary target was Brazil.

Now after an year of being launched the firm has finally collapsed and the news broke out after it wrote to its investors about the collapse. Interestingly the Brazilian authorities have issued an investment fraud warning against the FX corp last month itself. However at that time the firm in its reply to the warning that their platform is not a security and it provides an automated ‘arbitration platform” investment opportunity.

However, the FX Trading Corp could not really fool all the people all the time and finally scummed to the pressure from the regulators in the primary market and finally pulled the plug on its Ponzi scheme. Despite their Ponzi scheme being outset by the regulators the firm refused to acknowledge that they were cheating people with their claims and blamed their downfall on their exchange.

The letter to the investors sent out on June 29th read,

“The exchanges that we work (with) are not able to give us the necessary return due to the significant financial volume that we are operating [sic].

(For) more than two months, we have some limitations with the exchanges, and we have passed critical lines of security to be able to continue the operation, which is dangerous.”

Regulator Crackdown Is the Real Reason Behind The Collapse

As has been the case with most of the Ponzi schemes FX Trading Corp also presented absurd reasons for its closure rather than stating the real facts. However, the actual fall was triggered due to increasing pressure and several crackdowns from the regulators in Brazil. It was getting increasingly difficult for the firm to launder its money outside Brazil due to strict policies and crackdown by the authorities.

Any Ponzi scheme operator is well aware of the risks and knows that it won’t last for long, so when the regulator pressure and crackdowns increase these Ponzi schemes have only two options, either keep jumping through the hoops and keep the scam alive or run away with everyone’s money and FX Trading Corp chose the latter.

In order to ease off the increasing pressure from the authorities and the increasing number of complaints, the firm promised to return the initial investment of those who haven’t made more than what they invested. The MLM side of the business is all but shut and it is being expected that the funds would finally dry off and they would shut their shop officially by July 7th.

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