The forex market is still booming.

Despite warnings from authorities and the fact that many people have fallen prey to scams involving international stock and currency (forex) trading, these exchanges continue to entice people to participate through various means. They even operate more aggressively by organizing extravagant events and investment conferences to attract "investors."

Invitations received even before any transactions were made.

Last weekend, at a large hotel in District 1, Ho Chi Minh City, a reporter from Nguoi Lao Dong Newspaper observed hundreds of people attending the program "Seizing Investment Opportunities Amid Economic Volatility in 2023" organized by the HFM forex trading platform (HFM).

At the reception area, attendees were guided by HFM staff to scan the QR code on their phones, provide personal information to register for an account, and receive a guest code that would give them a "ticket" to enter the auditorium.

The first thing that caught our eye was a large screen advertising HFM as one of the best forex brokers, supporting 1:1000 leverage, having served 3.5 million customers, winning 60 awards in the global financial market, and boasting key partners including the famous French football club Paris Saint Germain (PSG)…

Representatives from HFM introduced the program, which included three foreign senior leaders in charge of HFM's Asia region, and two Vietnamese financial experts who answered questions from customers.

During the program, HFM's financial experts enthusiastically presented to investors the factors affecting global economic growth, explained the reasons for the rise and fall in the value of the USD, euro, yen (Japan), etc., and offered some forex trading strategies. For example, when the US raises interest rates, the USD usually appreciates against the euro. In that case, investors trading the USD/euro pair with a bullish USD position will make significant profits.

During the event, the staff proactively approached customers, inviting them to invest with attractive incentives, such as: "From now until March 16th, investors who open an account and deposit $300 will receive a $30 bonus and have a chance to be among the 15 winners of the Golden Cat lucky draw with a total prize value of nearly 1 billion VND."

Some participants in the program said they didn't know much about forex, so if they joined, they would rely solely on information and advice from the brokers. These individuals also mentioned that at the end of February, they attended a large financial event held in Ho Chi Minh City and were introduced to, advised on, and offered forex trading with high returns and attractive gifts by staff from various brokers such as HonorFX, TMGM, Infinox, Land-FX, MiTrade, Lion Brokers, etc.

Forex brokers organize seminars and investment conferences to encourage people to participate in forex trading.

Ambiguous headquarters

Acting as participants in the program, we asked where HFM's office was located. The staff informed us that their headquarters were in Cyprus, and their Vietnam office was in Ho Chi Minh City, but they were unable to provide the address to customers at that time.

To find out more, we requested the employee's personal phone number but were refused, citing the platform owner's prohibition. However, this person stated that in the next few days, HFM would call all registered investors to provide additional information, advise on profitability, and guide them on how to trade forex…

On the other hand, the staff at this exchange also stated that HFM is a Cypriot investment company regulated by the Cyprus Securities and Exchange Commission. As an international trading company, HFM is incorporated in St. Vincent & Grenadine.

However, when we searched on Google, we found that St. Vincent & Grenadine is an island nation located in the Caribbean Sea, with a population of over 100,000 people, and its economy is mainly based on tourism, agriculture , and mining…

However, HFM still provides investors with a wealth of information, such as the fact that the platform is authorized and regulated by the Dubai Financial Services Authority (DFSA), the UK Financial Conduct Authority (FCA), and notably, in the Republic of Kenya, HFM is authorized by the Kenya Capital Markets Authority as an online forex broker…

Fraudulent traps

In fact, the practice of soliciting international stock market and forex investments in Vietnam is not new. This activity flourished during the COVID-19 pandemic, with illegal forex platforms exploiting the situation to entice people to invest and promise high profits during their "free time."

In 2021, the Cyber Security and High-Tech Crime Prevention Department of the Hanoi Police announced that at one point, there were up to 300 illegal forex trading platforms in Vietnam, attracting many investors. These platforms operated by having brokers solicit and attract investors through telesales (offering investments via telephone), contacting people via social media platforms like Zalo and Facebook, and advising them on how to place trades.

Initially, they often encourage investors to win trades to deposit more money into their accounts. Then they advise them to place large trades, charging high and unclear fees, leading to investors losing all their money. Once the investors have lost all their money, they will introduce them to a new forex platform, promising that if they deposit more money, they will be able to win back their losses.

As one of the victims of forex trading, Ms. Nguyen Thanh Nhan (residing in Phu Nhuan District, Ho Chi Minh City) said that although forex brokers promise not to interfere with investors' buy and sell orders, the brokers often use tactics to manipulate investors into trading according to their wishes. "When I placed buy and sell orders for USD/euro currency pairs, the consultants constantly called, pressuring me to trade other currency pairs. I followed their instructions and as a result, I lost all the money in my account," Ms. Nhan recounted.

Recently, the Cyber Security Department of the Dong Thap Provincial Police also warned the public about the risk of "losing all assets when investing in forex." According to them, to gain the trust of investors, forex brokers often organize lavish training sessions, consultations, and parties, blinding many people to the fact that this is a trap.

These platforms are designed by administrators with functions that allow them to interfere with customer accounts. Admins can place orders directly into customer accounts, change account balances, and interfere with the order placement process, such as extending order delays, widening the buy and sell price range, and even "burning" customer accounts.

Notably, investors on these platforms are essentially trading with the platform owner. If an investor wins a lot, the platform owner will use technical means such as blocking account access, placing fake orders, leading to account liquidation and inability to withdraw money. Finally, after stealing the investors' money, the perpetrators shut down the trading platform to avoid detection by the police…

Extreme caution is necessary.

According to Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam's Ho Chi Minh City Branch, the provision of foreign exchange trading services is carried out by credit institutions and commercial banks that meet the business requirements. "The establishment of forex trading platforms is against the law, so relevant authorities need to take action. People investing money in forex platforms face significant risks and lack legal protection. Therefore, investors should seek further advice from relevant authorities and exercise extreme caution before accepting any offers to trade foreign currency," Mr. Lenh advised.

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