Foreign exchange, also known as forex, is the buying, selling, and trading of currency. In Malaysia, foreign exchange is only legal when it is done through a licensed onshore bank or with individuals that got approved by Bank Negara Malaysia (BNM).
However, there are many foreign exchange frauds and scams on the internet. If you’re not careful to spot a forex scam, you could risk losing a lot of money.
Look out for these warning signs when you’re forex trading:
High Initial returns
If it’s too good to be true, it’s likely a scam.
Fake operators may offer attractive high returns for the initial investment to lure investors to get on board. The large amount of profit gained encourages investors to reinvest. However, this is when victims fall into their trap and lose all their money.
Exists as an overseas operation
There’s a reason why only allow foreign exchange trading with licensed banks or individuals. If you encounter any problems with an offshore operation, authorities in Malaysia don’t really have any power to do anything.
Forex scammers would inform investors that they operate overseas and require them to send the contract and documentation to get it signed. In reality, the scammers will not sign anything. At this point, there’s nothing much you can do as there is no binding contract between you and the frauds, which also means you can’t take any legal action against them.
Lack of documentation
Illegal operators tend to claim that they work on a small scale for efficiency. They will also tell you that there’s no need for any identification or documents to trade.
Lack of documentation is a major red flag. Without them, you can’t verify any transactions.
Conclusion
Foreign exchange often gets a bad reputation due to reports of fraud and scammers, but if you’re careful with who you’re trading, there should be no problem in forex trading. Only deal with licensed traders, and check with authorities if you’re unsure about a trader.
Engage in foreign exchange trading with RHB by clicking https://www.rhbgroup.com/products-and-services/business/treasury/foreign-exchange!