SINGAPORE - An overseas online trading platform linked to fraudulent marketing tactics has been blocked in Singapore.
More than 40 victims in Singapore lost more than $330,000 when they traded through the unauthorised online platform, Arotrade, and subsequently experienced unauthorised trades in their accounts or encountered difficulties withdrawing their money, said the police, Infocomm Media Development Authority (IMDA) and the Monetary Authority of Singapore (MAS) in a joint statement on Thursday (May 28).
The police said they 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 indices on its website.
Police investigations revealed Arotrade had been linked to fraudulent marketing tactics, including the use of fake news articles claiming that prominent individuals, such as 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 access service providers to block access to Arotrade's website for all Singapore residents. This restriction has taken effect.
Police investigations are ongoing.
Members of the public should exercise caution when dealing with unregulated online trading platforms, the police and MAS advised. 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.
The public should first verify if the platform has a valid capital markets services licence issued by MAS by checking the MAS website.
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.
