A rising number of fraudulent trading platforms aretrapping investors in pyramid-like schemes that promise quick and high returnsbut ultimately lead to heavy losses and disappearing funds. The Financial Services and Markets Authority (FSMA)has highlighted how these scams lure victims using deceptive tactics beforecollapsing when the recruitment of new investors fails.How the Pyramid Scheme Works in Fake Trading PlatformsMany of these platforms operate on a pyramidstructure, relying on new investors’ deposits to pay returns to earlierparticipants. This gives the illusion of profitability, encouraging furtherinvestments and recruitment. However, when it becomes impossible to attract freshinvestors, the scheme collapses, causing significant financial damage tovictims. Fraudsters contact targets via fake ads featuringcelebrity endorsements, fake recruitment websites, false social media or dating app profiles, or messages claiming accidental receipt. Some scams involve acquaintances invitingothers to high-return investment opportunities. All share the tactic ofpromising huge profits in an unrealistically short period.More recent warnings: More Firms Caught Promoting Unauthorized Investments in WhatsApp Groups, German Watchdog WarnsVictims typically begin by depositing small sums,often around 250 euros. Fraudsters may offer remote access to devices under theguise of assisting with transactions, which can install harmful software. Thesemanipulations help scammers control accounts and increase the victim’s losses.“The investors are encouraged to recruit newparticipants. Their investment allows them to pay returns to the first investors.When it becomes impossible to recruit new participants, the pyramid collapses,”the FSMA mentioned. “In all cases, the fraudulent platform disappearscompletely, taking all the investors’ money with it.”Initial Investment and Remote Access TricksAfter money is deposited, trading interfaces aremanipulated to display fake gains, fostering trust. Subsequently, victims facepersistent pressure through calls, urgent offers, or threats, urging them toadd more funds, escalating their exposure.Initially, small withdrawals might be allowed to buildconfidence, but when victims seek larger withdrawals, platforms use excusessuch as taxes or fees to block funds. Ultimately, the platform vanishes, takingall invested money.The FSMA has published a list of fraudulent sites andclones to help investors avoid these scams. Some examples include Flash DealAcademy, NeuroTradeX, and clones reportedly masquerading as reputable financial providers. This article was written by Jared Kirui at www.financemagnates.com.