Russia’s CRFIN blacklists online investment project Alfareserve

Russia’s Centre for Regulation in OTC Financial Instruments and Technologies (CRFIN), a self-regulatory body for the Forex industry, today included in its blacklist an online investment project named Alfareserve.

The project, which operates from the website, has attracted the attention of CRFIN mainly due to the promise of guaranteed profits for the investments made. Alfareserve  promises that investors will get between 3% and 12% return on investment four days after they deposit their money. The size of the return has also sparked concerns, as the self-regulatory organization defines as suspicious any company that promises returns of more than 3% per month.

In addition, CRFIN is displeased with the fact that the online project is not positioning its activities in a legally correct way, that is, that it is misusing definitions of its business, thus misleading investors.

Moreover, lump bonuses are promised to those who bring new clients onboard.

The method by which the project operates is suspicious enough, as it encourages investors to pump money into the firm’s accounts, with the funds first directed to the “volunteers” (Alfareserve’s managers), then to companies “in desperate need of money”, and then to a charity fund. The project pledges that after four days the invested money is returned to the investors accompanied by a lavish percentage of profits.

CRFIN insists that being a client of Alfareserve implies huge risks for investors and advises them to stay away. The online project now belongs to a blacklist, which features a total of 33 companies against which CRFIN has warned. Among them is the notorious FOREX-MMCIS, which still operates. Even more interestingly, FOREX-MMCIS now alleges that it is in the final stages of obtaining a license to run its business in Europe, although no statements have been made about the particular jurisdiction where the company has filed for a license.

Online trading in Russia has been booming over the past several years, but so have scams, as the FOREX industry remains unregulated. The second reading of the FX bill is scheduled for October 24, 2014. Meanwhile, as the bill makes its way to becoming a law, Russian traders have to count on the work of self-regulatory organizations like CRFIN.

You can check out the full blacklist composed by CRFIN here.

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