Compared to other types of frauds, clone scams are far trickier and more difficult to detect. Those bogus firms not only swindle hard-earned money from investors, but steal the good name of genuinely legitimate companies as well. Therefore, we collected and analyzed the data of 20 well-known brokers’ clone firms.
Below, I listed the top 5 brokers which are often cloned by scammers, along with 3 tips to help you avoid the clone firms.
Top 5 established brokers which are often cloned
No.1 Exness
Exness stands the first of the list with at least 18 clones. It is well-known trading brand held by Exness Group. Founded in 2008, this group currently operates seven entities, including Exness (SC) LTD (formerly known as Nymstar Limited), Exness B.V. , Exness (VG) Ltd. , Exness ZA (PTY) Ltd, Exness (Cy) Ltd, Exness (MU) Ltd and Exness (UK) Ltd (formerly known as Exness Europe Limited).
No.2 AvaTrade
The second place is AvaTrade, whose clone firms reaches up to 16. AvaTrade is a reputable broker and also one of the most highly regulated online brokers to offer Forex and CFD trading. Established in 2006, it is licensed as a regulated broker in the EU, Japan, Australia, South Africa, UAE and the British Virgin Islands. As such, AvaTrade offers clients multiple trading websites in different languages, which is one of selling point for AvaTrade.
No.3 FOREX.com
FOREX.com is ranked 3rd and its clones hit 14. As one of the longest standing brand, GAIN Capital Group LLC, trading as FOREX.com, is a wholly-owned subsidiary of StoneX Group Inc, a NASDAQ-listed financial giant. Since operating in 2001, it has a strong presence across the world and regulated in multiple jurisdictions worldwide, including the FCA, NFA, CySEC, ASIC, MAS, FSA of Japan, CIMA and IIROC.
No.4 FXTM
The fourth place in this list is FXTM, with at least 12 clones. FXTM is the brand of four entities, ForexTime Ltd, Exinity Capital East Africa Ltd, Exinity UK Limited and Exinity Limited. These companies are all owned by Exinity Group. The broker is founded in 2011 and authorized and regulated in various jurisdictions, covering FCA, CySEC, CMA and FSC of Mauritius.
No.5 IC Markets
IC Markets is the No. 5 position of the list, whose clones is roughly 9. It is an Australian based online forex broker that was established in 2007. The company has multiple branches and is regulated by CySEC, FSA of Seychelles and ASIC. The Group has several regulated entities, encompassing IC Markets EU, IC Markets AU, IC Markets Global and IC Markets SCB.
3 Common Tactics Employed by Clone Firms
1.Make good use of the established brokers’ socialproof
All the clone scams either are unregulated or steal the license number of regulated brokers. Those impostors who steal the license number and pretend to be reputable or well-known firms, capitalize on the socialproof to fool investors into believing their claims.
FOREX.com is a good example of that. The broker had an excellent reputation among Chinese investors as it was approved by China Banking Regulatory Commission as early as in 2011. However, more than a half of clone firms are registered in China. It turned out that clone scams masqueraded as reputable firms could make much less effort to gain investors’ trust.
2.Choose brokers which have various company names and websites
Notably, all the five brokers have various company names, which are more likely to be the prime target of clone frauds. Let’s take Exness as an example. The names of Exness Group companies are too complex to be memorized. Although most fraudsters tend to make subtle changes to the established company names, 8 out of 18 scammers choose to directly adopt the original company name of Exness, such as Exness (SC) LTD and Nymstar Limited, which often makes investors much harder to detect.
Scammers even take advantage of the multilingual trading websites to pretend to be overseas company of the real broker. They usually claim to be local branches and add the country to the company name such as Ava Pairs Trade Markets Incorporated, or to the web site domain names like asiatrader.com.tw.
3.Choose brokers which use abbreviated trademarks
Using abbreviation as a trading name helps company keep their brand in customers’ mind but on the other hand, it may leave much room for those fraudsters. Adding or taking away words and transforming the upper or lower case are popular tactics for clone firms. For instance, FXTM is the abbreviation of its company name, ForexTime. Those fake FXTM firms add various words like FXTM Trading and Live Forex Time Group, or add asset classes such as OPTIONS FXTM and fxtm Investment option LTD to masqueraded as genuine brokers.
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