Malta Warns Investors Against Two Unlicensed Bitcoin Exchanges

Malta’s financial watchdog, the Malta Financial Services Authority (MFSA), has debunked the claims of two cryptocurrency exchanges of being licensed to operate in Malta. The MFSA called out the exchanges, ‘COINMALEX’ and ‘Crypto Foxtrades,’ in twin warnings on March 25, 2020. Both entities had claimed that they were authorized, registered, or domiciled in Malta, all of which were denied by MFSA.

False Claims Giveaways

COINMALEX’s “About Page” on its website, features a document which purports to be from the “Malta Business Registry,” a real institution within the small state. Also, the letterhead of the declaration shows the British royal coat of arms in prominence, a symbol that Malta quit using after she gained independence from Britain in 1964.

The MFSA warned that the entity might be dubious in nature, and urged investors to avoid doing any business with them; else they may risk losing funds.

“The MFSA wishes to alert the public, in Malta and abroad, that COINMALEX is NOT licenced NOR authorised by the MFSA to provide the service of an exchange or other financial services which are required to be licensed or otherwise authorised under Maltese law. Furthermore, information available to the MFSA suggests that COINMALEX is likely to be a scheme of dubious nature with a high risk of loss of money. The public should, therefore, refrain from undertaking any business or transactions with the above-mentioned entity”.

With Crypto Foxtrades, the claims are more outright than using a fake logo to authenticate documents. The exchange, on its “About Page,” claims to be “licensed and regulated as a Category 3 Investment Services provider by the Malta Financial Services Authority.”

That is a valid category, but the MFSA has denied that Crypto Foxtrades is licensed under it. The warning is similar to that of COINMALEX, with the regulatory body expressing concerns that the exchange may be dubious in nature, advising customers not to invest in them.

Malta Crypto Policing

With its reputation for being crypto-friendly and being the “Blockchain Island,” Malta polices its cryptocurrency industry strictly. Since 2018, MFSA has been closely monitoring Malta’s cryptocurrency companies, issuing alerts every time a fake license was found.

In recent times, the frequency of these alerts has increased. On the 18th, the watchdog issued a similar warning about another cryptocurrency exchange, MarketsFX, that was operating under false licenses too. The toll of cryptocurrency scammers has seen a brow-raising increase in the UK and US in the past weeks, and this may be due to the extreme fear that the market plunges have left investors with. Heavyweight cryptocurrency, Bitcoin, plunged to $3,867 on the 12th, one of its all-time lows since 2019.

Also, more people are looking to use the plunge as an opportunity to stack satoshis, especially investors that are new to the crypto space. These people are more vulnerable to attacks from dubious schemes.