MFSA sounds alarm over rise in financial scams, flags unauthorised entities operating in Malta

The Malta Financial Services Authority (MFSA) has issued a series of public warnings over fraudulent and potentially high-risk financial schemes, including scams targeting crypto-asset holders, entities claiming to offer financial services without authorisation, and advertisements falsely promoting an MFSA compensation programme.

One of the warnings concerns an increase in fraudulent schemes targeting crypto-asset holders during the transition to the EU's Markets in Crypto-Assets Regulation (MiCA).

The MFSA said it has become aware of reports across the EU of fraudsters impersonating crypto-asset service providers, financial regulators and supervisory authorities in an effort to convince consumers to transfer their crypto-assets to accounts controlled by criminals.

Scammers may contact consumers through email, telephone calls, messaging applications, social media or fake websites designed to resemble legitimate organisations.

According to the regulator, some fraudsters falsely claim that a person's crypto service provider is no longer authorised, before instructing them to move their assets to supposedly "safe" or "regulated" accounts. Forged documents, copied branding and pressure tactics may also be used to make the approach appear legitimate.

The MFSA warned that crypto-assets transferred in this way may be permanently lost.

The regulator said the implementation of MiCA provides a backdrop that fraudsters may seek to exploit. Crypto-asset service providers operating in the EU are required to obtain the necessary authorisations, while some businesses may discontinue operations, restructure or migrate customers to licensed entities during the transition.

Consumers were advised not to act on unsolicited requests to transfer assets and to independently verify communications through the official channels of their service provider. The MFSA also stressed that regulators should not be expected to request transfers of consumers' assets or confidential information.

MFSA flags DistributeX activities in Malta

In a separate notice, the MFSA warned about an entity operating under names including DistributeX, DistributeX Limited, DX Distribute and DX.

The Authority said the entity appears to operate from offices in several Maltese localities, including Birkirkara, Ħamrun, Mosta and Ħal Tarxien, and has invited members of the public to gatherings in Malta described as an "official employee meeting".

According to the MFSA, none of the entities operating under these names or variations of them are registered as companies in Malta.

The regulator also said the entity, its representatives and promoter groups are not, and have never been, licensed, authorised, regulated or otherwise approved by the MFSA to provide financial services requiring authorisation under Maltese law.

The MFSA said it identified features in the entity's business model resembling characteristics commonly associated with multi-level marketing arrangements and potentially with pyramid schemes.

These include an upfront financial contribution to participate, incentives to recruit new participants through referral commissions and the prospect of earning returns through a structured membership programme.

However, the Authority stressed that the presence of these characteristics does not in itself establish that the operation constitutes an illegal pyramid scheme. It nevertheless urged members of the public to exercise heightened caution and carefully assess the risks before committing funds.

Dream Point Partners

The MFSA has also issued a warning concerning Dream Point Partners, an entity which it said claims online to be a regulated investment firm and purports to operate from an address in Malta.

The regulator said it believes the entity is not operating from the stated Maltese address and stressed that Dream Point Partners is neither a Maltese-registered company nor licensed or otherwise authorised by the MFSA to provide investment or other regulated financial services.

The Authority added that information available to it suggests the operation is "likely to be a scheme of dubious nature with a high risk of loss of money".

It advised the public to refrain from entering into transactions with the entity on matters falling within Malta's Investment Services Act.

Fake adverts

A further warning concerns online advertisements falsely claiming that the MFSA has launched a compensation programme for Maltese residents who lost money through fraudulent brokers or fake investment platforms.

According to the Authority, the advertisements encourage users to click a "learn more" link to check whether they are supposedly included on a list of people eligible for compensation.

The MFSA said these claims are false, adding another form of regulator impersonation to the series of scams and potentially misleading schemes it is currently warning consumers about.