Traders Domain seemed like the ideal investment, promising high returns in favourable industries, such as trading gold, forex, margined or leveraged gold-US dollar pairs. Along with a professional setup, this scam drew in victims from across the globe, defrauding hundreds of investors of $145 million.
Despite it’s promising returns, the company is neither regulated nor licenced by any legitimate Financial Authority, making its operations illegal in numerous jurisdictions, including the UK. In the US, the CFTC regulates the derivatives markets and aims to protect the public from fraud, and in 2022, Traders Domain was added to the CFTC Red List for carrying out unregulated activities.
Traders Domain was a highly complex scam, with users being told to use Savvy Wallet, a crypto payment processor for the transfer of their funds, which was another fraudulent entity part of the scam.
Users were provided with a ‘Due Diligence Questionnaire’ outlining key details of the investment. Scams often involve users being provided with professionally drafted and detailed documents to lure them in. Investors were reassured that their investments would be safe, and they had full visibility of their trades and their performance via the MetaTrader5 platform. Users would also be sent emails regarding their trades. This evidences how complex and sophisticated investment scams can be.
How the scam works
Traders’ Domain utilised the classic ‘Ponzi Scheme’ model, which involves paying out existing investors with funds collected from new investors, making users believe they can access their funds and that it was a genuine investment. The reality is that the funds are continuously being recycled, with funds continuously redistributed within the cycle, whilst the company states they are growing due to the amount of funds being injected in. Ponzi schemes are successful when the following three factors occur:
- New investors are recruited and sending funds in.
- The investors do not immediately ask for withdrawals or payments.
- New and old investors believe they’ll get back their original investments.
Often Ponzi schemes begin to collapse when investors realise they are unable to withdraw funds, putting off new investors from joining, breaking the cycle.
Users were then advised in March 2023 that ‘Traders Domain’ had closed and had been sold to TruBlueFX and that their funds had migrated to the new entity. TruBlueFX was made available to account holders in July 2023, however users were still unable to withdraw their funds.
In 2023, the Commodity Futures Trading Commission (CFTC) sued Traders Domain, on the basis that it was a front for a scheme that defrauded at least $144 million from over 900 investors. In the lawsuit the CFTC alleged that the individuals behind the platform had been involved in three “interconnected fraudulent schemes” where they solicited investments for a forex trading firm that did not exist. The CFTC states that instead the funds were misappropriated for personal use whilst customers were provided with fake account statements.
We can help
Often in investment scams, users are left without a secure way to recover their funds and are left at a severe loss. However, we can help. Within weeks, our team at Wealth Recovery Solicitors has successfully recovered funds for clients who had fallen victim to the Traders Domain Scam. Therefore, if this has impacted you, reach out to us for a free consultation below.