Access to online trading platform Arotrade blocked

An overseas online trading platform linked to fraudulent marketing tactics has been blocked in Singapore.

More than 40 victims here lost over $330,000 when they traded through the unregulated platform Arotrade, and subsequently experienced unauthorised trades in their accounts or faced difficulties withdrawing their money, said the police, Infocomm Media Development Authority (IMDA) and the Monetary Authority of Singapore (MAS) in a joint statement yesterday.

The police also said they had received complaints from at least 40 Singapore residents about Arotrade, allegedly registered in Belize, a country in Central America.

Arotrade claims to offer trading in Contracts for Difference (CFD) for different asset classes such as stocks, foreign exchange, commodities, cryptocurrency and indexes on its website.

Police investigations found that Arotrade had been linked to fraudulent marketing tactics, including the use of fake news articles claiming that prominent individuals, like Singapore's political office holders, had endorsed investments in cryptocurrency, the statement said.

A capital markets services licence is required for an entity to carry out business, including dealing with CFDs in securities and foreign exchange contracts.

Arotrade does not have a licence and is therefore prohibited from carrying out its business.

This prohibition extends to people outside the country.

IMDA also determined that the information on the website contains prohibited content under the Internet Code of Practice, and informed Internet service providers to block access to Arotrade's website for all Singapore residents. This restriction has taken effect.

Police investigations are ongoing. MAS and the police have advised people to exercise caution when dealing with unregulated online trading platforms.

Most unregulated online trading platforms are located outside Singapore and pose a greater risk of fraud since the credibility of their operations cannot be easily verified. The public will face challenges in pursuing claims against overseas operators.

Online trading platforms may also require payment through credit or debit cards, increasing the risk of unauthorised card transactions.

People should check the MAS website to verify if the platform has a valid capital markets services licence issued by MAS.

They can also check MAS' investor alert list, which contains a list of unregulated individuals and entities who may have been wrongly perceived as being licensed or authorised by MAS.

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A version of this article appeared in the print edition of The Straits Times on May 29, 2020, with the headline Access to online trading platform Arotrade blocked. Subscribe