Fraud Awareness
Protecting yourselves from social media scams in securities market
The emergence and widespread adoption of social media have transformed our methods of connecting and sharing information.
Unfortunately, some entities exploit Social Media Platforms (SMPs) to lure and deceive unsuspecting investors in the securities market.
These entities employ various strategies to gain the trust and confidence of potential investors.
- **Unsolicited Invitations**: They often send unsolicited links to join WhatsApp Groups (such as VIP Groups or Free Trading Courses) to entice prospective clients.
- **Fake Profiles**: These entities create fraudulent profiles that present them as experts in the securities market.
- **Impersonation**: Frequently, they impersonate SEBI-registered intermediaries, well-known public figures, celebrities, CEOs, or MDs of established organizations.
- **Fake Testimonials**: They mislead investors by showcasing fabricated testimonials from group members, claiming substantial profits. As a result, investors are tricked into transferring funds to these entities' bank accounts, with false promises of similar high returns.
Given this situation, investors are urged to be cautious and not trust unsolicited messages from unverified individuals, and to avoid joining questionable WhatsApp Groups or Communities.
Guidelines for Investors:
- Engage only with SEBI-registered intermediaries and utilize authentic trading apps.
- Verify the registration status of entities with SEBI at: https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=14
- Conduct transactions solely through the official trading apps of SEBI-registered intermediaries found at: https://investor.sebi.gov.in/Investor-support.html
- Investors should only communicate wuth the SEBI registered email id and mobile number.
- Use “Validated UPI Handles” (“@valid” UPI IDs of SEBI-registered investor-facing intermediaries) and the “SEBI Check” platform by visiting https://siportal.sebi.gov.in/intermediary/sebi-check or through the Saarthi app, for secure investor payments (refer Press Release No. 64/2025)
- SEBI is releasing this statement to alert investors about the widespread fraud and scams perpetrated by unscrupulous entities, and to provide guidance on how to protect themselves while engaging in the securities market through SEBI-registered intermediaries.
Tips from a Research Analyst on Reducing Your Risk of Stock Market Scams via Social Media Platforms:
- **Step One:** Search for the Research Analyst's name at: https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=14
- **Step Two:** Obtain the email address and phone number of that Research Analyst.
- **Step Three:** Communicate with the Research Analyst regarding products and services exclusively through the email address provided on the SEBI portal mentioned above.
- **Step Four:** If the Research Analyst responds from the same email address, you can be assured you are communicating with a genuine SEBI-registered professional.
- *Step Five:* Always pay after verifying details through SEBI check: https://siportal.sebi.gov.in/intermediary/sebi-check and to a @valid UPI-ID and through Centralized Fee Collection Mechanism for Investment Advisers and Research Analysts (CeFCoM).
- **Step Six:** If they respond from a different email address, disregard the communication, as they may be impersonators attempting to scam you out of your hard-earned savings.
- Cyber Crime Reporting Portal: https://cybercrime.gov.in/
- Report online financial fraud at the National Cybercrime Helpline number 1930
- Register Your Financial Fraud complaint: https://cybercrime.gov.in/Webform/Accept.aspx
- Cyber Crime Help: https://cybercrime.gov.in/Webform/Crime_NodalGrivanceList.aspx
- Learning Video Gallery: https://cybercrime.gov.in/Webform/video-category.aspx
Regulatory Notice: Our recommendations and services related to crypto, Forex, and other third-party products fall outside the regulatory oversight of the Board (SEBI). Clients will not have recourse or support from the Board (SEBI) for any grievances or losses that may arise.
Extreme Volatility: Crypto assets are known for their high volatility. Prices can fluctuate dramatically over short periods, leading to the potential for significant and sudden losses, including the total loss of principal.
Lack of Regulation and Investor Protection: Most crypto assets and related exchanges are currently unregulated and do not provide the investor protections typically associated with regulated securities. They are not covered by government-backed insurance or safety nets, meaning recovery of funds in the event of an exchange failure or compromise is uncertain.
Market Manipulation and Fraud: The crypto ecosystem is vulnerable to market manipulation, Ponzi schemes, scams, and fraudulent initial offerings. Investors may fall victim to scams involving fake tokens, rug pulls, or unauthorized trading.
Cybersecurity Risks: Hacking, security breaches, and theft are common threats. Crypto wallets and exchanges often become targets for cybercriminals, which can lead to the loss of assets that may not be recoverable.
Irreversible and Anonymous Transactions: Crypto transactions are typically irreversible—mistaken or fraudulent transfers usually cannot be undone, and the anonymity of transactions makes tracing and recovering funds challenging.
Liquidity Risks: At times, crypto assets can be illiquid, meaning you may struggle to sell or convert them at reasonable prices, especially during periods of volatility or exchange outages.
Legal and Regulatory Changes: Future regulatory measures could significantly affect the value, liquidity, and legality of certain crypto assets. New taxes, laws, or outright bans could render an asset or exchange inoperable or worthless with little notice.
Operational and Technical Risks: Technical failures, changes in underlying protocols (forks), issues with blockchain technology, or the loss of private keys may result in loss of access to assets.
Not Suitable for All Investors: Investing in crypto is not appropriate for everyone, particularly those with low risk tolerance or those using essential or borrowed funds.
No Loss Claims: “There is no avenue for claiming losses incurred based on opinions or views expressed in crypto trading.” Please invest according to your risk appetite.
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