Some trading platforms do not execute a single order - prices, positions and profits are only for display. How this can be recognized and what legally distinguishes fraud from a trading loss.
Anyone who trades currencies, raw materials or contracts for difference usually knows that losses are possible. However, for a certain type of platform, the problem lies elsewhere: there is no trading at all. The trading interface is a simulation and the money deposited never reaches a market.
This is difficult for those affected to recognize because the interface is based on real trading programs. However, the distinction is important – for your own assessment as well as for the legal assessment.
How simulated profits are created
A licensed broker forwards orders to a trading venue or executes them itself according to set rules, keeps customer funds separate from its own assets and is subject to supervision. All of this is missing on a fictitious platform. The operators completely control the software: prices can deviate from what is actually happening on the market, positions are only created as a data record, and the account balance is a freely changeable number.
This control is used specifically. First, the account shows winnings so that further deposits follow. If the customer wants to withdraw money or asks critical questions, high losses can suddenly appear - combined with a request to inject more money in order to “save” the account.
Warning signs in ongoing trading
- The prices displayed differ noticeably from freely accessible price sources, or price fluctuations only occur on this platform.
- Almost every recommended position ends in profit as long as you continue to deposit.
- A supervisor tells you what to do over the phone or does so remotely on the customer's device.
- Invoices, order confirmations with execution venue and annual documents are not available or are only available upon repeated request.
- Deposits do not go to an institution with the name of the provider, but to changing third parties or to wallet addresses.
- A withdrawal request is followed by unexpected losses, new fees or a request for another deposit.
- An authorization cannot be found in BaFin's company database or there is a warning message.
Delimitation: fraud or trading loss?
Not every trading loss is due to a crime. Leveraged products such as contracts for difference (CFDs) are risky; Approved providers must point out this risk. In the European Union, there are also regulatory restrictions on the sale of such products to private customers, such as leverage limits and the exclusion of an obligation to make additional contributions. Anyone who loses money with real orders from an approved provider has usually realized a market risk.
The situation is different if orders were never carried out. Then the customer was deceived about the essence of the business: he thought he was trading, in fact he was transferring money to the operators. The request to compensate for an alleged loss through additional payments should also be viewed critically against this background.
Legal classification
Pretending that a trade is not actually taking place in order to obtain deposits regularly constitutes fraud according to Section 263 of the Criminal Code. Under civil law, claims for damages from Section 823 Paragraph 2 BGB in conjunction with Section 263 StGB and from Section 826 BGB due to intentional immoral damage come into consideration. In addition, financial and investment services in Germany may generally only be provided with a permit under the Banking Act (KWG) or the Securities Institutions Act (WpIG); If it is missing, this can also give rise to claims.
In principle, the amount actually deposited can be replaced, not the apparent winnings displayed on the platform. In practice, the hurdle lies in enforcement: the operators are often not identifiable, use company shells abroad and quickly forward funds. Depending on the payment method, it can be checked whether there are claims against other parties involved, such as holders of recipient accounts. A statement about the prospects is only possible after examining the documents.
Conclusion
Simulated trading platforms differ from risky but real trading offers in that no trading takes place. Indications of this include different rates, missing statements, payments to third parties and difficulties with payouts. Legally, this is not a trading loss, but rather fraud - with corresponding claims, which are often difficult to enforce. This article provides general information and does not replace legal advice in individual cases.
Frequently asked questions
Approved providers provide invoices and execution confirmations and can name the execution venue. If such documents are permanently missing and the prices differ from independent sources, this is a warning sign. A customer usually cannot provide reliable proof on their own; the overall view of the circumstances is crucial.
With a fake platform, the profit shown never existed. Compensation is generally based on the amount you actually paid, less any repayments. Things can be different with a genuine, approved provider against whom there is a contractual claim to payment.
Such a claim should be checked before any payment is made. On non-approved platforms, it is often used solely to obtain additional amounts. For the distribution of CFDs to private customers in the EU, an obligation to make additional contributions is also excluded by regulatory law.
