The Central Bank of Kenya (CBK) has cautioned Kenyans against dealing with unlicensed online forex dealers for the risk of losing their investment.
In recent months, the internet has been abuzz with downloadable online forex dealers who promise the best returns with many Kenyans losing their savings in the process.
“The attention of the Central Bank of Kenya (CBK) has been drawn to the emergence of unlicensed and unregulated online foreign exchange (forex) dealers and platforms,” said CBK in a statement.
According to the CBK, some of the characteristics of the unregulated forex dealers include:
- They are downloadable on Google Play and the Apple App Store.
- They aggressively market themselves on social media and mass emails.
- The collect or receive funds from customers in exchange for foreign or local currencies
- They do not have a requisite license issued by CBK or the Capital Market Authority (CBK).
- They have inadequate anti-money laundering and consumer protection safeguards.
“The purpose of this notice is to warn members of the public against dealing with unlicensed and unregulated online forex dealers. They should only deal with genuine and licensed financial institutions and entities,” said Central Bank of Kenya in a statement.
The warning from CBK comes after a series of complaints of Kenyans who have ended up losing hundreds of thousands of shillings to online forex dealers who either disappear as soon as they collect enough money or end up being a pyramid scheme.
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The prevailing tough economic times in Kenya have forced many to seek an alternative for making quick cash and some think forex trading is one of the easiest ways.
The CBK has also warned Kenyans against dealing with cryptocurrency companies since most of them are unregistered and are only out to steal money from the “investors.”
“Complaints regarding unlicensed forex dealers may be forwards to the Banking Fraud Investigation Unit,” said CBK.