Investing on the Futures Exchanges is a popular method of making money, but it’s not always a good idea. Some of these sites are scams. These sites are designed to defraud their customers and they often do it through various means, including spoofing, misrepresenting their ownership of an account, and making use of offshore retail brokers. These scams can cause serious problems for investors, and can also lead to big fines and even prison time.
Using spoofing to manipulate market prices is a federal crime. According to the Dodd-Frank Wall Street Reform and Consumer Protection Act, spoofing is defined as the act of canceling a bid or offer before the transaction is executed. This creates an illusion of demand and supply that is not real.
Dodd-Frank enlarged the Department of Justice’s ability to bring spoofing cases. In addition, Dodd-Frank formally outlawed spoofing on commodity futures exchanges. The CFTC’s Market Surveillance Unit is committed to detecting and prosecuting disruptive trading practices.
Spoofing involves a trader placing multiple visible orders on one side of the market while canceling orders on the other side of the market. This creates an illusion of depth in the market. Other traders are attracted to the flurry of activity around buy/sell orders.
Posing as a real stock broker
Whether you’re trading stocks or cryptocurrencies, there’s a good chance you’ve run across a scam futures exchange. Here are a few tips for keeping your money and your sanity in tact. First, make sure you do your homework before you make your bets. Second, make sure you use a trusted, reputable brokerage firm. And, finally, don’t be afraid to ask for a refund, if you’re not happy with the service. The last thing you want is to get caught in the middle of a scam.
There’s a lot of shady information out there, but if you stick with a reputable company, you’ll end up with the best possible experience. In short, make sure you do your homework before you decide to engage in a scam futures exchange.
Offshore retail brokers
Traders and investors need to be aware of the risks involved in offshore brokerage. These are often unregulated brokers who lack safety measures and are often free to scam customers.
A number of regulatory bodies have been monitoring the foreign exchange market since 2001. The Great Recession has brought about new financial regulations. These regulations are designed to protect the interests of the clients. In the case of a company’s insolvency, compensation schemes are in place to recover client funds.
Some offshore brokers are known for their outrageous leverage. For example, some brokers offer leverage of up to 1:500. While this might seem like a good idea, it’s not.
The Commodity Futures Trading Commission recently added 22 unregistered foreign entities to its RED List. These entities include offshore Retail FX brokers. Several of these entities are also offshore Binary Options brokers.
CFTC’s role in policing for illegal activities
CFTC’s role in policing for illegal activities on scam futures exchanges has been a topic of debate, with the regulator’s chief suggesting that Congress should give the agency more authority to regulate cryptoassets. The Commodity Futures Trading Commission is a federal regulatory agency that regulates commodity futures, swaps, high-frequency trading, and derivatives.
The commission’s Division of Enforcement is responsible for detecting violations of the Commodity Exchange Act. It works closely with the SEC and other law enforcement agencies to protect markets from fraud, manipulation, and market misconduct.
The Dodd-Frank Act expanded CFTC’s authority to enforce against fraud in derivatives based on virtual assets. The commission has the authority to file administrative sanctions, including orders of restitution, revocation of exchange trading privileges, and civil monetary penalties.