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Updated: 7 Apr 2022

Binance impersonators target forex scam victims

Fraud recovery scammers are targeting victims who previously lost money to 'EuropeFX'
Binance app showing on mobile

Fraudsters posing as Binance - the cryptocurrency exchange - are emailing forex scam victims, putting them at serious risk of recovery fraud.

Binance confirmed to Which? that these emails are fake.

This is known as a 'recovery scam' - a form of advance-fee fraud, where someone who has previously been a victim of fraud is targeted by fraudsters who pretend they can help them recover their money.

Which? recently reported that fraud recovery scams are up 33% and cost victims an average of £17,598, according to official Action Fraud data.

What do the Binance scam emails look like?

We've so far received two reports about these fake emails.

In each case, the scammers used the Binance logo and a deceptive email address - helpdesk@binance-emails.com - to convince recipients they were from the genuine company.

This email address has nothing to do with the real Binance.

The scammers claim to need to speak to the victims about 'funds that are intended to be released to you which were seized from the fake investment company “EuropeFX”'.

Example of the scam Binance email from helpdesk@binance-emails.com

We're concerned that other people have been contacted by these scammers and are at risk. If you have received an email like this one, don't be tempted to reply or respond to the scammer's request to click on links or call phone numbers.

We've reported these emails to the Financial Conduct Authority (FCA).

If you've been contacted by someone posing as Binance, tell the FCA - you can speak to them over the phone or use its online contact form.

The FCA had previously issued warnings about clone scammers pretending to be a firm called Maxiflex Ltd on the 11 September 2019 and 18 September 2019.Maxiflex Ltd - which traded as 'EuropeFX' - had its permissions removed by the FCA in 2020 and no longer operates.

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What are fraud recovery scams?

As the FCA explains on its website, these scams usually follow on from a boiler room or other type of investment scam. The perpetrators of the original scam may operate the recovery room - or pass on their details to other scammers - and contact the victim again pretending they can help them get their money back.

Last month, we reported another suspected fraud recovery scam after a member received an email from 'GFC Investment' claiming to be an investment bank offering refunds.

Scammers will typically try to speak to victims on the phone, using high-pressure tactics to trick them into paying upfront charges to cover 'tax, solicitor or administrative fees'.

In reality, they take the money and disappear.

If you have lost money to a fraud recovery scam, you should contact your bank immediately and report the scam to Action Fraud or the Police if you live in Scotland.

Who is Binance?

Binance [binance.com] is a global cryptocurrency platform.

Banks are increasingly blocking payments to cryptocurrency trading platforms to protect customers due to a spike in investment fraud, as we reported last summer.

In June 2021, the regulator issued a formal warning about Binance Markets Ltd, part of the wider Binance Group, stating that it is not currently permitted to undertake any regulated activities without the written consent of the FCA. It subsequently said that Binance Markets Ltd is 'not capable of being effectively supervised'.

Although Binance is a separate legal entity, which is not regulated by the FCA, its UK customers were unable to use the Faster Payments Service and their bank cards shortly after the FCA issued its warning.

Earlier this year, when Binance announced it had resumed these transactions thanks to a partnership with Paysafe, the FCA told the Financial Times:

'Our concerns about Binance remain. We received a notification of this business partnership but have limited powers to object to arrangements of this kind. Paysafe is aware of our concerns and is subject to close ongoing supervision consistent with our approach for firms of its size. We cannot comment further.'

We asked Biannce if it wished to comment on this but didn't receive a response at the time of publication.

If you do choose to use the services of Binance, it offers an online verification tool that confirms if an email address, phone number, WeChat ID, Twitter account or Telegram ID is genuine or not.

Crypto and forex scams are rife

There are growing concerns about weak consumer protection against scams involving cryptocurrency and foreign exchange (forex or FX) platforms, where money is difficult to trace by design.

We are also aware that victims of authorised push payment (APP) scams involving cryptocurrency and forex platforms are at risk of falling through the cracks - because current protections under the voluntary bank code only cover transfers to another person.

If victims are tricked into sending money to a digital wallet in their own name first, banks may refuse to reimburse them, although we would always advise referring to the Financial Ombudsman Service in these cases.

After Which? campaigned for mandatory reimbursement for APP scam victims to help plug gaps in protection, the government announced that it will make the necessary legislative changes to allow for mandatory reimbursement.

These changes must be introduced swiftly to protect the growing number of APP fraud victims, who lost the equivalent of £28,000 an hour between July 2019 and the end of June 2021, despite the voluntary code.

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