Kenyan Government Warning Issued
Retail Brokers, in the last three years, have expanded their operations to different countries in Africa. Considering that the European market is oversaturated, these brokerages have been looking for new clients in emerging markets across the exotic content. However, in shocking news, there’s already scammers in countries like Kenya that are imploring schemes against these brokers. On Friday, August 16, 2019, the Kenyan Government & the Central Bank of Kenya announced a warning to the public that unregulated entities shouldn’t be engaged.
The official statement from the Central Bank of Kenya stated: “Kenyans should only deal with genuine and licenced financial institutions and entities,” said the Central Bank of Kenya in a statement. Members of the public are therefore advised to confirm the licencing status of forex dealers from the CBK website…before engaging with the dealers, as they risk being defrauded and losing their money to unlicensed and unregulated forex dealers.”
These scam artists are managing their schemes through social media websites, mass emails and targeted bots. The Central Bank of Kenya noted that clients on the crypto & blockchain markets should be conscious of the emails or groups or bots accessed. Additionally, these scam artists are creating replica applications to encourage traders to register with a false rendition of a prior exchange. This is the most significant hurdle that investors and retail clients face.
It’s sporadic to see scam brokerages maintain proprietary software, which had led the CBK to believe these unregulated brokerages aren’t located in Kenya. This case has been similar in countries like Nigeria and South Africa, which have also faced unregulated brokers that aren’t established in their respective countries. However, these malicious websites claim otherwise and state that they are regulated in Kenya. The only way to guarantee an exchange is regulated correctly is by contacting the Central Bank of Kenya.