Experts warn against reckless investments in virtual currencies. The KNF is launching an information campaign in which potential investors will also be warned about the risks associated with the Forex market.
The aim of the campaign is to draw public attention to the risks associated with investing in cryptocurrencies and the Forex market, as well as sensitizing to the fact that the financial market can not be trusted by people and people offering “fast, reliable and high profit”. The campaign’s partners are the Ministry of Finance, the National Bank of Poland and the Police.
The Polish Financial Supervision Authority and the Partners of the campaign noticing the phenomenon of increased interest of individual clients in investments related to the trading of virtual currencies as well as on the Forex market, want to draw attention to the numerous risks that potential investors are exposed to.
In the case of “virtual currencies ” it is high likelihood of significant changes in their value in a short time, combined with the lack of appropriate legal and organizational safeguards, usually required for entities with funds entrusted by investors. An important threat is acting without appropriate licenses of entities that turn investors’ funds or store these funds. Additionally, it is worth remembering that some of these entities conduct aggressive marketing, promising security and increased investment returns, which should be treated as a deliberate misleading introduction of investors.
The Forex market is difficult to predict for an individual and less experienced investor (due to the leverage used and the volatility of the underlying instruments). In the case of dishonest forex brokers, they may use their informational and technological advantage over investors and influence the transactional conditions on the platform in various ways, thus causing a significant impediment to the expected financial result of investors. Another risk identified by the PFSA is the use by fraudulent or illegal (without appropriate licenses) brokers of aggressive marketing addressed to retail customers, which aims to attract customers by misleading them as to investment safety, certainty of profit, the substance of the investment or competences of persons presenting the offer. Such companies often offer care to alleged advisers whose task is to show investment opportunities to clients, but is in fact encouraging clients to invest cash into risky financial instruments.
The campaign is also aimed at attracting attention to people who want to invest their money so that they do not trust entities offering easy, reliable and high profits. There is a high probability that such undertakings may have the character of a financial pyramid or state unattended structure, in which the profit depends solely on the payments of people at its lower levels. The need for new participants to join it to ensure payments to people who have previously joined this structure means that it is unstable and ultimately must fail. Participants of the financial pyramid find out that the undertaking is usually a scam only when difficulties arise with the settlement of obligations to customers or even its collapse. Customers of such an entity have then little chance of recovering all or part of the funds entrusted.