BREAKING DOWN THE FMYTEX SCAM
This is one I have personal experience with, and with the number of red flags that were identified, it is one that I struggled with whether to believe it was legitimate or not.
This one is complex, so let’s break it down and see all the signs to watch out for and what they mean.
If you look up Fmytex on whois.com you will see that the domain was first registered in 2005.
This would normally be a really good sign and was actually one of the things that I struggled with.
Typically, when you see a domain this old you would think it was a legitimate website.
Whenever you see a Cryptocurrency trading site that is only a couple of months old, you have to ask yourself how long has this site been around.
Many scam sites will just swap out Domain names when they are discovered and exposed. This one, however, is pretty old.
“So how can this be a scam?” you ask. Just because the Domain Name is older, doesn’t mean the site or the business that it represents is actually that old.
This could be an existing Domain Name that was allowed to lapse by the original owner and was taken by someone else who swooped in and registered the domain out from under the original owner.
If you don’t pay to renew your domain, someone else can actually lay claim to it and use it for their own purposes.
This is rare because there is a grace period that the original owner can still reclaim their domain, but if they don’t notice within the grace period window, or if they simply abandon the domain.
It is up for grabs by anyone else who wants to take advantage of it and use it to try and lend legitimacy to an otherwise shifty business site because it looks like it has been around longer than it actually has.
Another note about this information on Whois.com is the location of the registrant.
This will come into play later. If you note here, it gives the person’s name and email address (which is a generic, free G-Mail address) and the location of the registrant which you will notice says “Castleton, California, US.” Remember that detail… it will come up again later.
So to recap, here is what to watch for on the Domain Name registration information:
- The Date of the registration — how old is this domain? If it is very new, beware. But even older domains are no guarantee of legitimacy.
- Name and address of registrant — does it even list a person or is that information hidden?
- Location of the registrant — can you discern what country this domain was registered in?
PROFESSIONAL LOOKING WEBSITE
Fmytex gets top marks for having a professional-looking website. This would pass for a world-class trading site.
They didn’t skimp on this part. The details are immaculate… except for certain telltale signs.
With the amount of work put into this site, you know it is done by someone that is taking this scam seriously, and probably paying a pretty penny to maintain the illusion.
There are, however, a few details where they dropped the ball and I’ll point those out below.
The takeaway here is to not be fooled by the bells and whistles and fancy-looking sites. Not all scams are put out there by a basement dweller somewhere.
Some internet scams are big business and employ several, maybe even dozens of people depending on how successful they become. Just like any other business, you usually have to spend money to make money.
One area where they messed up was with their page showing the company’s executive staff.
You’ll notice there is a list of positions and images of the executives, all with impressive job descriptions… but not a single actual person’s name.
I actually laughed a bit when I noticed this one. I wish I had noticed it sooner.
In general, when you see one of these impressive and professional-looking websites showing their executives or board of directors, you should see actual verifiable names.
Look these names up when you find them. A good place might be LinkedIn, where legitimate business people would have a full profile, including their work history, CV, and years’ worth of comments, posts, and other activity.
Of course, nothing says a legitimate businessman (or woman) is required to have a profile on LinkedIn, or anywhere else for that matter, but if they do, that should help lend some credibility to their business.
Another piece of evidence that they want you to believe they are a US-based company comes from their “About” information on their site where they claim:
“Fmytex Global established in California, U.S, is a crypto trading and investment platform.Our company has gained the trust of US regulators.”
The CFTC (Commodity Futures Trading Commission) is the federal governing body that ensures that trading brokers and exchanges are following the laws under the United States.
Their purpose is to make sure these agents are operating fairly and properly.
There are a lot of trading scams out there, and apparently Crypto Binary Options trading is a common venue for fraudulently taking advantage of unwary investors.
This was the trading I was doing on Fmytex.
I mostly traded the Bitcoin/USDT pair of options on a 2 minute set. Well, it turns out for any company in the USA to legally perform binary options trading, they must be registered with the CFTC. Fmytex is not registered.
Do you remember above when we discussed the Whois information and I said to remember where the address was listed? Well, if Fmytex was actually located in the US and doing business here, they would be subject to the laws of the US, and therefore would be required to register with the CFTC in order to legally do any binary options trading.
Now obviously this requirement doesn’t apply to any business that exists outside of the US, but if they have an office here, they are doing business here.
This means either, Fmytex is NOT located in the US, as they would have us believe, or they are breaking the law and would be shut down by the federal government, likely meaning all of those fake executives in the previous section would be going to federal prison.
Currently, the only company that can legally offer binary options trading in the United States because it is registered in the US by the CFTC to perform binary options trading is NADEX out of Chicago, IL.
Here is an advertisement in the form of a “news article” that was obviously distributed in an effort to try and legitimize the site. That one actually begins with trying to instill confidence in their legitimacy by stating:
“Fmytex is registered by the MSB (Money Service Business) in California, and regulated by the FinCEN. It is an innovative multi-currency crypto asset exchange for the world and is one of the few exchanges in the USA that complies with the laws and regulations of the financial industry.”
An interesting point of note, is that they ARE actually registered with the MSB, however, if you look at the site, it actually tells you that the information is provided by the person submitting it and in no way means the MSB endorses or validates the company or its information.
It is an entirely worthless certification for judging whether a company is legitimate or not.
The MSB website clearly states:
“The inclusion of a business on the MSB Registrant Search Web page is not a recommendation, certification of legitimacy, or endorsement of the business by any government agency.
The MSB Registrant Search Web page, which is updated on a weekly basis, contains entities that have registered as Money Services Businesses (MSBs) pursuant to the Bank Secrecy Act (BSA) regulations at 31 CFR 1022.380(a)-(f), administered by the Financial Crimes Enforcement Network (FinCEN).
Information contained on this site has been provided by the MSB registrant. FinCEN does not verify information submitted by the MSB. Information provided on this site reflects only what was provided directly to FinCEN. If an error or incomplete information is detected on this site, the registrant should follow the appropriate instructions for correcting a Registration of Money Services Business (RMSB) form.”
You’ll also notice it lists the supposed address of: 17800 CASTLETON ST STE 665, CITY OF INDUSTRY, CA 91748 which is an actual address that you can find on Google Maps. However, when you go to the street view and look at the building, you will not find any markings or signs indicating Fmytex exists there. This doesn’t mean they don’t have an office in that building necessarily, but whether they do or don’t, they couldn’t be doing any legal business there, as we pointed out above.