Sometime in April 2020, the discussion with Maxigrid started. A customer lost several hundred thousand Euros via the broker Scam RoyalsFX. He had made the deposits on the instructions of RoyalsFX via the BitandBuy crypto platform of the CySEC-regulated Maxigrid. He lost everything and involved FinTelegram in the complaint and shortly afterward BitandBuy disappeared without a trace. However, more scams and victims appeared after our Request 4 Information in June 2020.
First Request 4 Information
The German lawyer Vladislav Dimitrov is an expert in scams and represents victims and respective fraud cases. He shared his experience with the European Funds Recovery Initiative (EFRI) and FinTelegram. Moreover, the Request 4 Information exposed that scams like RoyalsFX, LincolnFX, FXPrime, 10CryptoMarket, MarketCapital, RoyalCBank, or COBRA CFD have used Maxigrid‘s BitandBuy platform for client-victim deposits. In other words, Maxigrid as a registered CySEC investment company acts as a payment processor and facilitator for scams. The German lawyer said that he also has cases where Maxiflex is said to be involved in payments around scams.
After FinTelegram’s initial request to Maxigrid, the BitandBuy platform (www.bitandbuy.com and https://crypto.maxigrid.com) simply vanished into thin air. No statement was provided by Maxigrid. Total panic was obviously the order of the day. The CEO Jekaterina Pedosa and the beneficial owner Roy Almagor
- denied that they would work for scams in any way.
- did not or could not explain the sudden disappearance of BitandBuy.
- argued that the victims of the scams wanted to buy cryptocurrencies on BitandBuy and
- they had no knowledge that the scam employees had access to the victims’ BitandBuy accounts and/or would coordinate with BitandBuy.
- have not supported the investigations in any way.
From the records of the victims of the scams that FinTelegram has analyzed, there is no doubt that there was very close coordination between the scams and BitandBuy. Moreover, it can also be proven that bank transfers from customer victims of the scams went directly to bank accounts of Maxigrid with the Lithuanian GlobalNetInt. So it was not only crypto-transactions via BitandBuy in the environment of the facilitated scams.
Sure, it can happen that a scam operator uses a payment processor without being aware of the criminal nature of the client. However, it is completely unlikely that a large number of scam operators use a payment platform and operate with exactly the same pattern. This would have to be noticed in a proper KYC/AML check. Registered investment companies are even obliged to do so in Cyprus. The vast number of scams alone suggests an intentional approach.
Call for Compliance Check
Just days after the UK FCA banned Rodeler and other CySEC-regulated financial services providers, Maxiflex and Maxigrid voluntarily withdrew from the United Kingdom. Their UK licenses, which they had received virtually automatically under the EU passporting scheme, were cancelled.
It’s about time for CySEC to finally get involved in the escalating Maxigrid-BitandBuy Cause and to conduct a check of the regulated entities Maxigrid and Maxiflex. They may or may not have acted in compliance with the regulatory regimes in the different jurisdictions. It’s the ultimate task of their home regulator CySEC to prevent its licensees from engaging in illegal activities such as facilitating scams. Currently, the information available from scam victims suggests that Maxigrid and Maxiflex may have been such fraud facilitators by offering payment services to scams.