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After crypto fall, unaware Indians lured by forex betting apps

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As the craze for investing in cryptocurrency has slowed down, investors are now looking for other options to make some quick money. Without having much knowledge about it, many Indians are investing their money with forex trading apps to trade in the dollar, euro, and yen, but the regulatory professionals believe that it could put these small investors on the wrong side of the law.

There are several apps offered by brokerages like St. Vincent and the Grenadines, a Caribbean tax haven, and the British Virgin Islands (BVI), which are conducting webinars and online advertisements showing that trading tools helped them to recover from a financial crisis during and after the Covid-19 pandemic.

The Indian laws allow authorized dealer banks and financial firms to have a forex trading license to deal in foreign currencies. Residents are also permitted to trade currency like USD-INR and Euro-INR on local stock exchanges. However, an individual trader cannot trade directly in foreign currencies or even transfer funds abroad under RBI’s liberalized remittance scheme.

However, these apps tell a different story, “There is no law in India which prohibits Indian traders to trade on our platform. We have a large number of customers from India. Also, the company is a member of the Financial Commission… you can view our certificate here: https://financialcommis sion.org/olymp-trade,” said the customer service person of the app OlympTrade.

In a press statement released by the Reserve Bank of India (RBI) a few months back cautioned investors about the currency trading sites.

“RBI specifically prohibits Indian residents from remitting funds for trading in foreign exchange. So, any Indian resident paying an Indian company for carrying out trading in foreign currency is also prohibited. We fail to understand how an Indian company can collect money from Indian residents and pay to an overseas company… under which nomenclature, and claim that they are complying with the Indian laws,” said Rajesh Shah, partner of the CA firm Jayantilal Thakkar with and Company.

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