Cambodians burned as forex trading company halts operations

cambodians burned as forex trading company halts operations

Sumary of Cambodians burned as forex trading company halts operations:

  • PHNOM PENH — The abrupt closure of a politically connected investment company in Cambodia has left investors worried they may never recover their money — and turned a spotlight on the country’s nascent derivatives market..
  • GoldFX Investment, which says it earns returns for investors through foreign currency trades, announced a “temporary”.
  • GFX, as it is also known, is blaming the trouble on three foreign former board members whom it claims embezzled $20 million from the company, local news outlet Voice of Democracy reported..
  • The minimum amount for an account is $1,000, and one local news outlet reported that at least $27 million was tied up in the company..
  • The scandal has turned a spotlight on the relatively new market for derivatives trading in Cambodia, and, experts say, highlights the risk that inexperienced investors may not understand what they are getting into..
  • Stephen Higgins, a former bank chief in Cambodia, told Nikkei Asia that GFX’s reports of monthly 5% to 10% returns were “absurd”.
  • He said there are other derivatives brokers and investment companies in Cambodia that have thrown up red flags, too, such as managers who appear to have no prior experience in finance..
  • The Securities and Exchange Regulator of Cambodia, or SERC, began issuing licenses for derivative traders in 2016..
  • He told the Khmer Times last year that the derivatives market grew from $5 million in 2017 to $200 million in 2019..
  • A fund manager with years of experience in the region said many local forex and gold derivative traders promised returns that were “just not feasible”.
  • The investment company’s management has political connections in a country with a “pervasive culture of impunity”…

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