Lok Sabha Question No. 1681 (UNSTARRED), answered on 2025-03-10
Subject: Consumer Protection against offshore Margin Trading Platforms
Ministry: FINANCE
Asked by: Shri P P Chaudhary

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 1681

ANSWERED ON MONDAY, MARCH 10, 2025/ PHALGUNA 19, 1946 (SAKA)

## CONSUMER PROTECTION AGAINST OFFSHORE MARGIN TRADING PLATFORMS

## 1681. Shri PP Chaudhary:

## Will the Minister of FINANCE

be pleased to state:

(a) whether the Government plans to implement consumer protection measures to safeguard Indian  users  from  the  risks  associated  with  unregulated  foreign  platforms  offering  margin trading in forex, commodities and cryptocurrencies, if so, the details thereof;

(b) the number of complaints received regarding financial losses suffered by Indian residents due to such offshore margin trading platforms in the last three years, year-wise;

(c) whether any mechanism put in place to help affected consumers to recover their funds from such platforms, if so, the details thereof;

(d)  whether  the  Government  has  conducted  any  assessment  of  the  total  value  of  Indian investments in such platforms, if so, the details thereof; and

(e) the steps taken by the Government to create awareness among Indian residents about the risks  of  investing  through  such  unregulated  platforms,  and  whether  any  inter-ministerial coordination exists to address this issue?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI PANKAJ CHAUDHARY)

(a) to (e):  The Reserve Bank of India (RBI) has cautioned the public against dealing in forex with unauthorized entities/unauthorized forex trading platforms as per provisions of Foreign Exchange Management Act (FEMA), 1999 through advisories and awareness campaigns. An 'Alert  List'  containing  names  of  entities  which  are  neither  authorized  to  deal  in  forex  nor authorized to operate electronic trading platforms has been published on the RBI website. This list  also  contains  names  of  entities/platforms/websites  which  appear  to  be  promoting unauthorized entities/ETPs, including through advertisements of such unauthorized entities or claiming to be providing training/advisory services.

RBI has been cautioning users, holders, and traders of virtual currencies about the potential risks associated with potential economic, financial, operational, legal, customer protection, and security concerns through public notices. RBI has also advised its regulated entities to carry out  customer  due  diligence  processes  for  transactions  in  virtual  currencies,  in  line  with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML),  Combating  of  Financing  of  Terrorism  (CFT)  and  obligations  under  Prevention  of Money Laundering Act (PMLA), 2002, etc. Further,  the Advertising Standards  Council of India has laid down in its guidelines that all advertisements for Crypto/Virtual Digital Asset (VDA) and VDA exchanges need to carry the disclaimer that such assets are unregulated and can  be  highly  risky  and  that  there  may  be  no  regulatory  recourse  for  any  loss  from  such transactions.

RBI received 169 references related to the issue of unauthorized forex trading in the last three years.  The  number  of  complaints  reporting  financial  losses  on  account  of  trading  on unauthorized forex trading platforms are as follows:

|   Year |   Number of complaints |
|--------|------------------------|
|   2022 |                      2 |
|   2023 |                      8 |
|   2024 |                      7 |

The number of complaints received by Directorate of Enforcement are as follows:

*till 28 February 2025

| Financial Year   |   No. of Complaints |
|------------------|---------------------|
| 2022-23          |                  01 |
| 2023-24          |                  02 |
| 2024-25*         |                  03 |

Directorate of Enforcement is mandated to take appropriate action in cases of violations of the FEMA and PMLA.

Further, the Ministry of Home Affairs has established the Indian Cyber Crime Coordination Centre (I4C) to provide a framework and eco-system for Law Enforcement Agencies (LEAs) to  deal  with  any  cybercrime  in  a  comprehensive  and  coordinated  manner.  The  'Citizen Financial Cyber Fraud Reporting and Management System' has been launched for immediate reporting of financial frauds, including trading through such unauthorised platforms.

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