Investors take Forex platform ROFX and its founders to court

Investors take Forex platform ROFX and its founders to court

Want to hear a crazy story?

The plot is about the scam forex platform ROFX.

The business was operating for a while.

But now, it’s under the heat.

I’m gonna discuss everything about the ROFX scam.

So, if you were looking for a shady story, you are in for a treat.

Saqib Iqbal 150 Updated:

Content

ROFX explained

ROFX explained

ROFX was a scam forex robot.

People invested in but never got their fair share.

To understand the full story, let’s focus our camera on ROFX.

ROFX stands for “robotically operated foreign exchange.”

The company presented itself as a forex robot.

The company presented itself as a forex robot

The platform used algorithms to perform trades.

Everything was automatic, like every forex robot.

The system performed trades on people’s behalf.

In return, people were given shares in ROFX.

Now, you’ll be thinking, “Oh yeah, every robot does that, what’s so shady”?

The platform didn’t pay much.

That’s the shady part.

Over two years, ROFX gave little profits to investors.

They didn’t allow withdrawals.

In this way, they maximize their account balances.

And created a stable impression.

Hence, they rob people of their investments.

Further reading

ROFX reach court

ROFX reach court

When people invest, they want to maximize their returns.

Instead of giving maximum returns, ROFX was giving peanuts.

So, let’s find out how ROFX reached court.

On September 29th, victims of the ROFX scam filed a complaint.

They filed it in Florida’s South District Court.

According to the filers, ROFX planned a fraudulent scheme.

They tricked investors into depositing.

ROFX claimed investors would get daily profits in percentage.

But little did investors know, ROFX gave them nothing.

The scam was on a global scale.

They were deceiving people from all parts of the planet.

The victims wanted an emergency action.

They wanted the court to apply Federal Rule 23.

They also made a complaint of violations of federal RICO statutes.

So, what’s RICO?

Glad you asked!

The Racketeer Influenced Corrupt Organizations Act came in 1970.

It was signed to prevent organized crimes in the US.

So, investors of ROFX filed a RICO against the company.

In this way, the court could preserve the assets of the victims.

When reading specifics, I found out that investors require an immediate order.

The claimants wanted the court to:

Froze all ROFX assets and put a restraining order

Prevent any relevant docs from missing or destroying

Expedite the fact-finding process

The freezing of assets comes under Ex Parte Temporary Injunction.

The victims reported a ROFX account balance of over $15 million.

Further reading

Updates on the case

Updates on the case

The victims filed a complaint on September 29th.

So, almost two months have passed.

Here’s an update on the case.

On November 19th, the victims provided additional docs to the court.

Provided additional docs to the court

These docs provided evidence supporting Ex Parte.

These docs were concerning transactions among the entities involved.

The major reveal

Here’s a twist in the story.

One of the entities involved was Notus LLC.

Notus is a Colorado-based foreign limited liability corporation.

It was the entity where ROFX deposited funds.

The victims explained they served subpoenas on multiple banks and crypto exchanges.

These banks and exchanges were seeking KYC and transaction data.

The KYC is “know your customer information.”

In response Bank of America and Deutsche Bank provided transaction info.

The banks acted as a middleman between Notus and Borys Konovalenko.

Borys Konovalenko is the head of Notus LLC.

In addition, Bitstamp also jumped in.

The exchange provided a consulting agreement between Notus and Borys.

I’m gonna give you a quick summary of the docs each part provided.

From 2019 to 2020, three accounts sent $561,640 through various transactions.

Can you take a guess whose accounts were these?

These accounts were under the name of Borys.

No surprises there!

The accounts were at two different banks.

One of them was in Ukraine and the other in Slovenia.

Bank of America acted as a middleman for transactions between the banks.

In 2020, the accounts sent $59,436 through 12 transactions.

Again these accounts were under the name of Borys.

They held these accounts in Ukraine, and Deutsche Bank served as a middleman.

So, can you tell the total number?

That’s a whopping $621,076.

There’s another reveal.

Borys provided Bitstamp with a contract.

The contract was between Borys and Notus.

It suggested Borys as an e-commerce consultant.

Why did Borys provide the contract to Bitstamp?

Because Bitstamp requires KYC when you register with them as a business.

So, Borys provided a vague contract to the exchange.

The agreement came into effect in January 2019.

The ending date was January 2022.

In return for his consulting services, Notus would pay a one-time fee.

The fee was $372,300.

This payment would come into effect when the contract ends.

Further reading

A take on ROFX scam

A take on ROFX scam

The ROFX scam worked similarly to other forex scams.

Scams like these are plaguing the forex market.

Here I’ll draw an analogy between ROFX and other forex scams.

I’ll explain later how you can identify such scams.

Look what the ROFX stands for “robotically operating the foreign exchange.”

This raises certain eyebrows in itself.

There are two types of systems that fall in this category; signal selling and robot trading.

With robot trading, a scammer touts its forex trading system.

With robot trading, a scammer touts its forex trading system

They create hype around it.

They advertise things like “earn money while sleeping.”

Or,

“Become profitable today with our tested system.”

Firstly, this process is fully automated.

No one is sure if the system is backtested.

Or have been verified.

Secondly, when the system isn’t verified, it produces random signals.

This is not trading; it’s a gamble.

So, here scammers like ROFX take the money of the investors.

And in return, give them nothing.

Managed accounts were another red flag for ROFX.

They mentioned on their website that all users have to do is deposit funds.

And then sit back and let their daily profits come in.

However, you should know that brokerage firms are market makers.

They make money when you lose trades.

So, platforms like ROFX will do anything to make users lose.

Another important thing was ROFX regulations.

Their site mentioned that ROFX had regulations from the US, UK, and Canada.

However, there was no mention of license numbers on the website.

In addition, I found out that ROFX advertised they had licensed from BCSC.

The British Columbia Securities Commission is the regulatory body of Canada.

When I checked the BSCS website, they mentioned that they don’t regulate ROFX.

And ROFX is targeting citizens of British Columbia by mentioning their names.

So, a big no-no for everyone.

Further reading

You can identify such scams

You can identify such scams

Scams like ROFX do exist.

What you need to do is be smart about it.

Look for potential red flags and identify them.

Here’s how you can identify:

Risk-free investment

Investing is a risky trade.

If someone is claiming risk-free opportunities, you should stay away.

High returns

Often scammers promise high returns.

It can say 100% or 200% monthly returns.

As we know, forex is not a get-rich-quick-scheme.

Here’s a quick fact: Warren Buffet makes between 20 to 50% annual returns.

So, high offers should concern you.

Time pressure

If a firm asks you to invest asap, then it’s a scam all the way.

These firms offer discounts or bonuses to lure you.

You get attracted, and you immediately sign up.

A regulated firm doesn’t put time pressure on you.

They know investing isn’t an overnight thing.

Catchy ads

Many scamming platforms use catch ads to lure you.

They use luxurious videos to trick people.

People do get attracted, and they fall for the trap.

No broker or a platform would make such claims and advertise like this.

Bottom line

So, now you know how ROFX created a scam scheme.

In the coming days, we’ll get more info on the overall scam.

We’ll keep you updated!

And do look for the points I mentioned on how you can avoid such scams.

Not every auto trader or a forex signal provider is a scam.

You just need to separate the bad apples from the fresh ones.

Further reading