Forex Scam Case Study – The Unlicensed Forex Trader Loses Out on Billions of Dollars

Mobeen Azhar, a journalist, investigates how investors lost millions of pounds after becoming victims of forex – foreign exchange – schemes in a four-part series published by Reuters. Investors were added to WhatsApp groups managed by unlicensed and unregulated so-called traders, according to Mobeen’s book Scam City: Money, Mayhem, and Maseratis; allegations of investors being told that they couldn’t withdraw their cash; and, after losing everything, investors discovering that their investments, made through a firm called Infinox registered in the Bahamas, were not subject to UK regulation or the control of the Financial Conduct Authority (FCA). 

Forex Chart

On Plymouth High Street in Autumn 2020, a video clip of a man handing out cash to random strangers went viral after it was posted on social media. Gurvin Singh Dyal, a biomedical student, was featured in the local newspaper in Plymouth after his video was published. However, when authorities attempted to track down the 20-year-old (pictured above), they discovered that there were several different versions of the story. 

According to many, he was simply handing out money to complete strangers because he’d made it big in the world of online trading, and he wanted to give back. Others thought it was a publicity stunt, and there were a slew of questions that needed to be answered as a result. Gurvin, on the other hand, remained silent. He’d already left Plymouth, and his social media accounts had been deleted as of a result of his departure. 

His whereabouts were unknown, but it was soon discovered that the cash handout had been part of a carefully curated stream of online promotion. Before his profile was deleted, Gurvin had amassed a following of 125,000 Instagram followers and was considered a social media influencer. Pictures of his gold Maserati, designer clothes, and jewelry, interspersed with pictures of his pet goat, characterized his online persona almost entirely as one of affluence and luxury. Influencer culture is primarily concerned with converting followers into paying customers. So, what exactly did Gurvin have to sell?

Over £27million lost to scams involving crypto and forex investments in 2018/19

Securities and Exchange Commission

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Table of Contents

What is a Forex Scam?

coin vanish

Foreign exchange fraud refers to any trading scheme that is used to defraud traders by convincing them that they can expect to make a large profit by trading in the foreign exchange market. Foreign exchange fraud can occur in a variety of ways. According to Michael Dunn of the United States Commodity Futures Trading Commission, currency trading became a common form of fraud in the early part of 2008. When all is said and done, trading in the foreign exchange market is a zero-sum game, which means that for every gain made by one trader, another loses. 

Due to the fact that brokerage commissions and other transaction costs are subtracted from the results of all traders, foreign exchange is considered a negative-sum game in this context. As of April 2019, the spot forex market, which includes currency options and futures contracts, was worth more than $6.6 trillion per day on average. Unscrupulous operators are attracted to forex scams because of the enormous amount of money floating around in an unregulated spot market that trades instantly, over the counter, and with no accountability. 

Forex scams offer the opportunity to make fortunes in a relatively short period of time. While many once-popular scams have been put out of business as a result of aggressive enforcement actions by the Commodity Futures Trading Commission (CFTC) and the establishment of the self-regulatory National Futures Association (NFA) in 1982, some old scams have persisted, and new ones are constantly emerging.

forex trading chart

Forex brokers who use wide bid-ask spreads on certain currency pairs are engaging in shady business practices, making it more difficult to make profits on trading transactions. Be wary of any broker who is based in an unregulated offshore jurisdiction. It is possible that individuals and businesses that market systems, such as signal sellers or robot traders, will sell products that have not been tested and will not produce profitable results. Commingling funds or restricting customer withdrawals could be signs that something is wrong with the forex broker’s business practices. When it comes to the EUR/USD, for example, some brokers do not offer the standard two- to three-point spread but rather spreads of seven pip or greater. 

Pips are the smallest price movement that a given currency’s exchange rate can make based on market practice. The smallest change is the last decimal point in the price of most major currency pairs, which is because most major currency pairs are priced down to four decimal places. Take into account the fact that every trade will cost you four or more additional pips, and any potential profits from a successful trade will be wiped out by commissions, depending on how the forex broker structures their trading fees for clients. However, be cautious of any offshore retail brokers who are not regulated by the Commodity Futures Trading Commission, the National Futures Association, or their respective country of origin. 

When confronted with actions, these tendencies are still present, and it is relatively simple for businesses to fold and disappear with the money they have earned. Many believed that these computer manipulations deserved to be locked up in a jail cell. However, historically, the majority of violators have been companies based in the United States rather than those based in other countries.

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Gurvin Had Amassed a Following of 125,000 Followers

A video clip of a man handing out cash to random strangers on Plymouth High Street in Autumn 2020 went viral after it was shared on social media. The incident occurred on the city’s main street. Following the publication of his video, Gurvin Singh Dyal, a biomedical student from Plymouth, was interviewed and featured in the local newspaper. When authorities attempted to track down the 20-year-old, they discovered that there were several different versions of the story to choose from. 

A popular theory holds that he was simply handing out money to complete strangers because he’d made it big in the world of online trading, and he wanted to give something back. Because some people believed it was a publicity stunt, there was a deluge of questions that needed to be answered as a result of the incident. Gurvin, on the other hand, remained deafeningly quiet throughout. In the wake of his departure from Plymouth, his social media accounts were removed from the internet as a result of his departure. However, it was soon discovered that he had received the cash as part of a carefully curated stream of online promotions and that his whereabouts had not been known. 

man on computer

Before his Instagram account was deleted, Gurvin had amassed a following of 125,000 followers and was widely regarded as a social media influencer in his field. Almost entirely, his online persona was characterized by images of his gold Maserati, designer clothes, and jewelry, interspersed with images of his pet goat, which characterized his online persona as one of wealth and luxury. In today’s society, influencers are primarily concerned with converting their following into paying customers. So, what exactly did Gurvin have to sell was the question.

According to some of Gurvin’s former Instagram followers, he amassed his fortune through forex trading, also known as foreign exchange trading. This involves buying and selling currency and making profits or losses depending on whether the value of the trade rises or falls in value during the course of the trade. Even though it didn’t seem like a natural fit for a Biomed student, he explained his philosophy on his Instagram profile with the words: “There are no wealthy parents. There will be no excuses. Straight-up hustle is the name of the game.” Gurvin, and many others like him, promote the notion that trading can be done in one’s spare time on the internet. 

If you wanted to pay Gurvin for a trading “course,” he agreed to do so, and he also promised to go further: he would reveal the secrets of his success. He would trade on behalf of anyone who was open-minded enough to experiment with this new way of making money through his company, GS3 Trades. From the outside, it appeared that Gurvin had gotten a great deal out of his forex trading. Is it, however, possible for non-professionals to make money through trading?

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Insights into This Social Media Influenced Forex Scam Case

How Much Did They Steal?

Gurvin was discovered by Jonathan while browsing Instagram. In 2019, he became a member of GS3 Trades and was invited to join a WhatsApp group where a number of investors were able to communicate directly with Gurvin. His initial investment was in the amount of £1,000. Informed that forex trading entailed risks, Jonathan, 24, sought the assurance of Gurvin, who informed him of the presence of the Financial Conduct Authority (FCA). This national regulatory body has strict rules in place to control the amount of risk that can be taken with investors’ money. 

When Jonathan noticed that his investment was growing, he increased his investment. In just a few weeks, he had amassed a total of £17,000 in investments. That was the sum total of his savings. The value of the investment increased steadily until it reached a peak of nearly £30,000 in value. However, on the eve of Christmas 2019, everything changed. As a result, Jonathan’s £17,000 investment, as well as any growth he had experienced, had been reduced to £48 by the day after Christmas.

Jonathan claims that he was prevented from withdrawing his money because of misleading messages from the organizers of GS3 Trades. He goes on to explain: “It was explained to us before we signed up that we could withdraw the money at any time. Then, while we were in the chat room, Gurvin and his administrators said something like, “If you withdraw, we’ll remove your account from our system.” It will bring all of the trades to a close. It will have a negative impact on everything.” Jonathan is one of many investors who have a similar story to tell. It turned out that Gurvin’s GS3 Trades was, in fact, running multiple investor groups via WhatsApp, all of which were backed by the same assurances of FCA regulation and promises of simple withdrawals. These assurances turned out to be lies. 

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The Financial Conduct Authority (FCA) did not regulate GS3 Trades. In the end, investors such as Jonathan lost a total of more than £3.8 million in their capital investments. In his account, Jonathan describes how members of the WhatsApp group were unable to comprehend what had happened.

“There were people who said things like, “This is my life savings,” or “I can’t pay my rent.” Some had taken out loans from their parents. People had everything taken away from them.” It became clear after reviewing the WhatsApp group chats, voice notes, and testimonies from those who had lost money that Gurvin was not acting alone. Tristan Jones and Mirko Notturno were mentioned several times as “group admins,” according to various sources. 

There were also references to a company called Infinox, which is a trademark of the company. Every person I spoke to for this documentary told me the same story: they’d been told that GS3 Trades was making their investments through a brokerage firm called Infinox, which is part of a financial group with an FCA-regulated office in the City.

Get Equipped with The Right Knowledge for Your Own Well Being!

Business can be a difficult environment to operate in, especially when it comes to credit card disputes and fraud. It is always possible to have Ezy Chargeback (now a part of Sift) take action on your behalf, and they do so through an integrated platform that helps you organize data and automate responses in a way that makes sense for your company’s specific needs and goals. They accomplish this through the use of a robust technology platform that integrates with the way your company conducts business and is enhanced by powerful data aggregation capabilities and triggered workflows, among other capabilities. They are also there to be at the forefront of your company’s operations, assisting you in the fight against fraud so that you can concentrate on the other aspects of your company’s operations.

By visiting the Background Affiliation Status Information Center (BASIC), which was established by the National Futures Association, you can conduct due diligence on the forex broker you’re considering. Many changes have driven out the crooks and the old scams while also legitimizing the system for the many good firms that have sprung up in their place. However, you should always be on the lookout for new forex scams because the temptation and allure of huge profits will always attract new and more sophisticated scammers to this market.

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A lot of those who contact us have questions and concerns about their personal and business data being compromised. We aim to arm you with the legal and technical know-how in the fight against scams. Also, we will be able to refer you to top scam recovery agencies.

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