The Central Bank of Kenya (CBK) has turned the spotlight on online unlicensed and unregulated Forex dealers and platforms.
CBK has warned members of the public against dealing with such Forex dealers and platforms.
In the notice by CBK, Kenyans are advised to only deal with genuine and licensed financial institutions and entities which are registered with either CBK or the Capital Markets Authority (CMA).
“They should only deal with genuine and licensed financial institutions and entities. Members of the public are therefore advised to confirm the licensing status of forex dealers from the CBK website and/or CMA website before engaging with the dealer, as they risk being defrauded and losing their money to unlicensed and unregulated forex dealers,” the notice read in part.
These platforms which can be easily downloaded on Google Play and Apple Store aggressively market themselves through social media and mass emails. They have been collecting funds from customers in exchange for foreign or local currencies.
CBK has said that these platforms have inadequate anti-money laundering and consumer protection safeguards. The notice released by CBK also suggested that the platforms do not have the requisite licenses issued by CBK or the Capital Markets Authority (CMA).
Forex trading works with the rate at which one currency can be exchanged for another. It is always quoted in pairs like the EUR/USD (the Euro and the US Dollar). Exchange rates fluctuate based on economic factors like inflation, industrial production, and geopolitical events. These factors will influence whether you buy or sell a currency pair.
Forex is the world’s largest market, with about 3.2 trillion US dollars in daily volume and 24-hour market action. Trading foreign exchange on margin carries a high level of risk, and may not be suitable for everyone. It is advisable that before trading in foreign exchange one should carefully consider their investment objectives, level of experience, and risk appetite.