CRFIN blacklists for promising risk-free guaranteed profit

Russia’s Centre for Regulation in OTC Financial Instruments and Technologies (CRFIN) today added one more entry to its “Black List” of investment companies that display signs of financial pyramids. CRFIN, which is the self-regulatory organization for Russia’s Forex industry, has been warning often lately about such schemes, which operate using the principle “existing investors are paid from the funds of new investors”.

The latest addition to the “Black List” is, an online investment project that lures clients with promises of super high guaranteed returns. For instance, clients are promised a minimum return on investment of 17% per month if they entrust their funds for 9 months into the traders hired by the company.

In addition, investors are promised hefty bonuses for attracting new clients.

The business model is not transparent enough to show how the profits are generated. Therefore there are no guarantees that the RoI is generated from any other means than from the investments of new clients of the business.

Worthy of attention is the fact that 22Groups claims to be regulated under the Markets in Financial Instruments Directive (MiFID), which is a futile claim given that the company is not regulated in the EEA.

The company targets Russian investors mainly, saying it offers trust managing services. However, such a business activity requires a specific license by the Bank of Russia, a document which 22Groups does not have.


To view the original announcement by CRFIN about 22Groups, click here.

To check out the full CRFIN “Black List”, which already includes 45 companies, click here.

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