The conversion of one country’s currency for another’s is the definition of today’s topic, Forex. Also called Foreign Exchange (FX), as defined by Investopedia, “it is the process of changing one currency into another for a variety of reasons, usually for commerce, trading, or tourism.” This foreign exchange transaction takes place on a spot on the internet called the foreign exchange market or forex market. Named the largest and most liquid market in the world as many buyers and sellers with low transaction costs are found there, trillions of dollars change hands in the said marketplace every single day. Today, however, we’re going to focus on the sharp rise in popularity of Forex in 2020 and bring forth answers regarding (where them dudes at now) its scam-friendly nature and the question: Forex or Fauxrex?
When Covid-19 entered the building that once was Normal Life, and before it became this very clingy thing that it is today, the world was suddenly plunged into what felt like inescapable darkness. Everything, especially everyday life as we knew it, was put into question. That sense of normalcy we never gave a second thought, abruptly went missing, and to be quite honest, two years later, “normalcy”, very much feels like a pipe dream. As if our worries were boldly highlighted and with all the panic and hostile uncertainty of the future cocooning us, in charged the traders.
They came equipped with great knowledge of the market they constantly spoke of, while promising one would be left with nothing but deep pockets. Though, what they didn’t plainly tell you is the reality of trading Forex: that it only “may make you rich if you are a hedge fund with deep pockets or an unusually skilled currency trader. But for the average retail trader, rather than being an easy road to riches, forex trading can be a rocky highway to enormous losses and potential penury,” and this is according to Investopedia. The traders, with reassuring hands, held yours as you crossed the threshold and entered the world of Forex. There, there are no buildings where, say, you and I can sit and trade currencies. Oh no. Instead; investment banks, commercial banks, and retail investors institutions trade on connections via trading terminals and computer networks. With the appealing “Give me $300 to invest and I’ll flip that for $1000 for you,” and being sandwiched between fear of catching the fast-spreading virus and the trader’s oath of financial stability which allowed for the possibility of becoming rich? Are you even surprised folks worldwide were pulled in? Though all too soon, all that glittered just wasn’t gold.
A wildly concerning fact of 2022 is that now more than ever, the internet is home to a wide range of scams. These include the popular emotional scam or ‘Romance Scam’ where the target is made to believe they’re in a relationship. As time ticks on and the trust is built, the fraudster will encourage the victim to open a trader’s account via a link sent by them, and from there, it will go downhill. It was reported by News From Wales, “According to the FCA, clone investment scams increased by 29% during the Covid 19 lockdown in 2020.” Such scams include the ‘Forex Brokerage Scam’ and the ‘Forex Signal Scam’.
Now, according to News From Wales, a Forex scam happens when “an unauthorized or unlicensed forex trading platform or brokerage offers forex services.” The truth of the matter is this, hordes of people fall into the trap of trading with an unregistered brokerage, its status unknown to you the unsuspecting trader. In turn, your invested capital becomes at risk as such a brokerage can crumble at any time in this, the Forex Brokerage Scam. Now, the Forex Signal Scam: firstly, when talking about a signal scam we need to quickly define what a Forex Signal is. They’re identifiers provided by signal providers making known the available trading opportunities. The thing is, signal providers are to be registered, however, many people sell signals unregistered. Over in the UK, the Financial Conduct Authority let it be known that you’re putting yourself at risk if one uses an unregistered signal provider, and the FCA does not cover compensation for losses. The scam happens when signal scammers create a series of false signals which they then sell to traders, mostly new traders, for money when there is a strong demand for market signals.
Back in 2020, with the blanket of precariousness enveloping the world, various groups within FX traders had what felt like the world in a chokehold. In the palm of their hands, they held folks that were panicking about the pandemic: health-wise, vaccine-wise, future-wise, finance-wise, and when-it-would-end-wise. This fueled this particular group of traders’ agenda which was to simply profit off of people’s vulnerability. Now, don’t get me wrong, Forex is nothing new, as it has been around for centuries. Let me explain. It started via bartering, then came its evolution over the years since 600BC. You see, according to DailyFX, “the barter system is the oldest method of exchange and was introduced by Mesopotamia tribes. Under the barter system, goods were exchanged for other goods. The system then evolved and goods like salt and spices became popular mediums of exchange. Ships would sail to barter for these goods in the first-ever form of foreign exchange. Eventually, as early as the 6th century BC, the first gold coins were produced, and they acted as a currency because they had the critical characteristics like portability, durability, divisibility, uniformity, limited supply, and acceptability.” As recently as 1996, however, changes in its evolution continued and that year, the first online brokers opened and therefore, Internet Trading became a thing. Today, more than $5 trillion is traded each day in forex.
With such large numbers being in play every day on the market, a sense of “you’ll make money” was established. This swayed the decisions of many as the folks reassuring them of the wonders of investing were friends. This guy, in particular, we’ll call him Derek, became renowned for his approach. He’d scope his potential client on a financial front which he found via the folks around him that just so happened to be friends of his friends and most times, these individuals were doing quite alright financially. He’d do his research on the person via their socials and even casually ask mutuals if said person was “loaded”. When satisfied with what he unearthed, he’d then make his move. Of course, with him staying at Villas and modern apartments, his traveling, the money-heavy activities he engaged in, the parties and the type of drugs he did and, of course, the people he associated with and clubs he frequented; his social media reflected the life of someone who was actually making bank. With all of these things as the reason for his apparent wealth, this created a bubble of perceived security. Then, the icing on the cake was the supposed knowledge he constantly spewed about the market that he was constantly on both his phone and laptop, eyebrows furrowed, checking.
Though, to be honest, his reputation quickly adopted the image of deceit and he stepped into the role of scammer. You see, the people he convinced to invest with him weren’t seeing the returns as he’d so colorfully promised. However, what they were seeing was his social media feed which screamed “Lights! Camera! Action!” with an on-display elevated lifestyle. Then, fully motivated by the posts, they’d approach him once more for their money. Though, when they asked for their refund, he’d string them along with promises of paying them “when he had” all the money. This struck many as odd as what he’s saying heavily contradicted the lifestyle he’s led others to believe and didn’t hesitate to show on his various social media platforms. Still, he stuck to the script of not having any or enough funds in his account whenever he was hit with the talk of a refund. Bear in mind, at the same time he’s being hit with “I need my money back”, he’d be seen going to luxury hotels, chilling in spas, riding expensive bikes and of course, partaking in fine dining.
Actually, a friend of mine, we’ll call him Ryan, invested a considerable amount with Derek and when Ryan asked for a refund, after several conversations that grew harsh a number of times, finally got everything back two years later and to be quite honest, it wasn’t an easy return of cash. Apart from being dishonest about his location and the date of returning to his homeland, Derek was also claiming that he didn’t have the funds. Yet at the same time, according to his Instagram, he’s being seen staying in expensive places, doing expensive activities, and destination hopping all the while during a pandemic.
So where they at?
Today, two years later, where them boys at? Them get rich bros with the latest iPhones, the butterfly doors, who swear they’d never go broke? Those “let me flip your shit” and get you a lick-type bros. Where they at? Don’t sweat it, I’ll wait.
