Platforms: Aipu Limited (aipufx.com), Fidefx Investments Limited (fidefxltd.com)
Defendants: Qian Bai, Lan Bai, Chao Li
Investigation Status: Active — Federal Civil Enforcement Action Filed
Alleged Investor Losses: $3.6 Million (32 victims identified)
In its civil enforcement action filed on September 27, 2024, the Commodity Futures Trading Commission sued in the U.S. District Court for the Western District of Washington a group of defendants operating phony commodity trading platforms that defrauded at least 32 customers out of $3.6 million. This is one of the emerging types of fraud that involve scams related to social media investments that utilize false trading platforms and false performance reports to channel customers’ money while pretending to operate legitimate commodity trading operations.
How the Scheme Operated
The defendants operated a fraudulent investment scam, extracting at least $3.6 million from at least 32 customers. They contacted their victims via social media platforms like WeChat, WhatsApp, and Line. On these platforms, operators working on behalf of the defendants promoted insider tips and expert trading advice, which promised customers profits of up to 30% per trade.
The victims were asked to deposit funds into trading accounts, which could be made up of traditional currency or cryptocurrency, via websites run by the defendants. Once the victims deposited their money, they would receive account statements that looked like real statements from actual trading accounts. However, during the CFTC’s investigation, it was established that there was never any actual trading account held by Aipu or Fidefx. The money was sent straight to offshore bank accounts, which belonged to the defendants, where it was stolen.
The account statements provided to victims were entirely fabricated. Aipu and Fidefx have no trading accounts in the United States for the customers’ assets, and no trades are conducted on behalf of the customers by the two firms. The defendants have no commodity interest trading accounts, use no customer assets to margin, guarantee, or secure trades of defrauded customers, and misappropriate all assets they receive from customers presently and in the past.
Targeting Asian American Communities
The CFTC’s complaint indicates that the scheme targeted Asian American customers in the United States primarily. The use of WeChat and Line, which are highly used by Asian Americans, was intentional by the scammers. The solicitors used Mandarin and other Asian languages, which further indicates the intention of the scammers to target the Asian community.
This is not the first time that the scammers have targeted the Asian community in the United States, as the romance scams, “pig butchering” scams, and fake investment platforms often target the Asian American community in the United States, among other immigrant groups, due to the lack of knowledge of the U.S. financial regulations and the ability of the community members to refer other members of the community to the scammers through their close relationships with one another.
Legal Charges and Relief Sought
The complaint was filed by the CFTC against the defendants for violating the Commodity Exchange Act. The defendants swindled the customers by soliciting them for leveraged commodity contracts, off-exchange retail foreign exchange contracts, and commodity futures contracts without the necessary registration. The defendants also misused the customers’ money for their own use and lied about the account reports.
The CFTC demands that the defendants pay the penalties for violating the Commodity Exchange Act, impose trading bans on the defendants to prevent them from engaging in any future violations of the Commodity Exchange Act, and impose fines on the defendants for the unjust enrichment of the customers.
How to Verify Legitimate Trading Platforms
The CFTC has issued repeated warnings about this category of fraud. Before you part with any money, make sure the company you are investing in is registered with the CFTC. To do this, you can use the NFA BASIC tool. If the company you want to invest in isn’t registered, you should exercise extreme caution and not send them any money.
NFA BASIC is a free tool for the public to look up trading platforms, brokers, or individuals to see if they are authorized to offer commodity trading services to the public. If you come across any trading platform offering leveraged trading contracts, forex contracts, or commodity futures trading that isn’t registered with the NFA, it’s most likely fraudulent.
Verification Status: UNREGISTERED — CONFIRMED FRAUDULENT
Neither Aipu Limited nor Fidefx Investments Limited is registered with the CFTC or the NFA. Both of these trading platforms have been confirmed to be fraudulent and offer no legitimate commodity trading services. If you come across the trading platforms aipufx.com or fidefxltd.com, you should steer clear of them. If you come across any individual claiming to work for these trading platforms, you should immediately report them to the CFTC’s Division of Enforcement.
Fintvia Assessment: The Aipu/Fidefx case is an example of how social media has become the default way to lure people into commodity trading scams. The defendants were relying on culturally relevant messages, false performance reports, and payments to offshore funds. The CFTC case is still in process, but it will depend upon their ability to recover funds sent to offshore accounts. The lesson to be learned by investors is that if it isn’t in the NFA BASIC database, it isn’t a legitimate commodity trading operation.
