Blue Trading, a crypto, forex, and commodities trading fund that closed last month citing a “major trading software malfunction”, is now under investigation by the Crypto Valley Association (CVA) for “inappropriate business conduct”. Former investors who lost money are also preparing a class action lawsuit against parent company BluVenture Group Ltd, who were expelled from the Financial Commission in September 2018.
Return Too Good to Be True
Blue Trading was founded in 2012 as a way in which users could deposit cash and trade foreign exchange and commodities, it was managed by the fund using bots and algorithms. Crypto trading was added in 2015 and the results were spectacular – 590% in 2016 and 870% in 2017. These results naturally garnered both positive and negative attention, with people, including authorities, beginning to look deeper into the group’s actions. An audit did little to quell the rising concerns about the group’s legitimacy, with the situation being summed up by one individual in a crypto trading Telegram group:
The British Columbia Securities Commission (BCSC) seemingly agreed, adding Blue Trading to its Investment Caution List, stating that, “The Company is not registered to trade in, or advise on, securities or exchange contracts in BC and has not filed a prospectus or an exempt distribution report in BC.”
— BCSC InvestRight (@BCSCInvestRight) July 6, 2018
Expulsion from Financial Commission
Two months later, the Financial Commission, an industry-supported self-regulatory organization to which BluVenture Group Ltd were members, issued an industry alert where they announced that BluVenture Group Ltd had been “permanently expelled” by the body:
Effective September 26, 2018, BluVenture Group Ltd and its affiliated brands BlueBroker and BlueTrading were expelled from membership with the Financial Commission due to repeated violations and failures to adhere to membership Rules and Guidelines.
Blue Trading nevertheless continued to operate, now amidst a barrage of warnings on social media about their reputation, until February 25 when their website was replaced by a notice of closure, which stated:
On 21 February, our administrative team discovered an enormous trading loss on some trading accounts. This was due to a major trading software malfunction. We have spent the last days auditing accounts with Onyx Capital and they are unable to “reverse” any of these transactions caused by the lot allocation error. It would obviously be impossible to recover funds trading from while still paying our 3rd party traders and maintaining our monthly financial obligations to keep operating.
Angry investors took to Twitter to bemoan the platform’s demise, and three days later the CVA announced that it was “looking into allegations expressed publicly against Blue Trading of inappropriate business conduct, based on the CVA’s General Code of Conduct”.
A Word of Warning
Investors have reported that their balances are either zero or close to zero, but with the company being an unregistered entity there would seem to be no way, other than the legal route, for former investors to potentially get their money back. Their experience echoes those of many who have lost money in unregistered schemes, and should act as a further warning to those wishing to invest to do their homework before putting a cent into such platforms.