Markets
Asian review site gets attention for ‘making scam brokers look legit’ – now it’s moving into cryptocurrencies – DL News
Special report
- Corporate documents obtained by DL News show how Singapore-based WikiFX pressures foreign exchange brokers.
- It costs $128,000 to get positive reviews.
- Its sister company, WikiBit, is now looking into crypto platforms.
For years, an Asian company called WikiFX has been pushing the boundaries of the region’s titanic currency trading industry.
WikiFX is not a broker or trading shop in the foreign exchange, or forex, market. Instead, review and evaluate investor intermediaries like Trustpilot.
And that’s not a nice thing.
WikiFX forces brokers to sign up for its program or else they’ll be hit with negative reviews, according to company documents obtained by DL News and entrepreneurs who have dealt with the company.
“If you pay them, they will erase all the negative complaints.”
— Jonathan Baumgart, Atomiq Consulting
Jonathan Baumgart was one of them.
The CEO of Atomiq Consulting, a consultancy for currency brokerage firms, said he created a website for a client that caught the attention of WikiFX.
“Suddenly there were reviews of my company on WikiFX even though it was just a website template,” he said. DL News.
“If you pay them, they will erase all the negative complaints, so with a little bit of money you can make a scam broker look legitimate,” he said.
Join the community to get our latest stories and updates
Now its sister company, WikiBit, has set its sights on cryptocurrencies.
Looking for customers
WikiBit, a self-described “global blockchain supervision and query platform,” claims to have 10 million users across 170 countries and regions.
And he’s looking for more clients.
In May, another sister company, WikiEXPO, organized a sensational event atop Hong Kong’s tallest building for hundreds of attendees. Entrance was free. Another conference was held in Tokyo on June 22, and yet another is planned for Bangkok in September.
WikiEXPO’s speaker roster includes crypto industry leaders and even regulators. WikiFX and WikiBit are both listed as “co-organizers” on promotional materials.
Just like WikiFX, WikiBit ranks exchanges on a scale of 1 to 10 based on criteria such as regulatory compliance.
But the firm gives high scores to crypto platforms that have been cited as potential scams by regulators, a DL News investigation found.
The company also exaggerates the regulatory bona fides of companies that advertise on its site.
Representatives for WikiFX and WikiBit did not respond. DL News numerous requests for comment.
Hong Kong crackdown
The Wiki Group is ramping up its activities just as Hong Kong, China and other Asian nations are starting to introduce licensing regimes to bring order and transparency to the industry.
Investors lost $400 million to cryptocurrency fraud in Hong Kong in 2023, according to police officials. Illegal exchanges are responsible for much of the losses.
JPEX, for example, disappeared last year with an estimated value of $200 million, police say. Although law enforcement has made dozens of arrests, they have not filed any charges or identified who owns JPEX.
“A sales pitch seen by DL News said it costs $128,100 to show positive reviews to users.”
As for who or what is behind WikiBit, it’s a bit confusing.
WikiBit is one of several related businesses with the word “Wiki” in its name. Its website has links to WikiFX, WikiEXPO, and a unit called WikiResearch. The WikiEXPO site has a link to the WikiFX app. And WikiEXPO’s privacy policy refers to WikiFX.
On its website, WikiEXPO said it was founded in 2019 as part of a “financial vertical media” business. (The group is not affiliated with Wikipedia.)
The corporate registration number of a Hong Kong company called Wiki Co matches the one provided by WikiFX on one of the Wiki sites. It lists one director, Zhang Xiaofei, a Chinese citizen with an address in Harbin, a city in northern China.
Indeed, WikiFX refers to the “relevant laws and regulations of the People’s Republic of China” in its service agreement. WikiBit’s terms of use refer to disputes as “subject to the jurisdiction of the Chinese courts” and provide an address in Shanghai.
But there is no shortage of references to headquarters in Singapore and Hong Kong.
In a message on LinkedIn, Loki Sou, COO of WikiEXPO, declined to comment on behalf of his company, as well as WikiFX or WikiBit.
“Integrity deposit”
As convoluted as the Wiki Group may be, at its heart is a simple business: online reviews. The model appears to have been developed by WikiFX, the forex business. The firm lists 49,000 forex brokers, according to its website.
The idea behind WikiFX was to provide guidance for retail forex traders in China who wanted to avoid scams. WikiFX researched the corporate documents of companies to determine if they were legitimate. The platform is closely followed on Chinese language forex forums.
In some cases, the company sent agents to check whether a physical office actually existed, according to articles posted on its site.
When WikiFX gave companies negative reviews, it also offered them a solution.
As part of its “legal assistance program,” the company asked brokers for money to improve their ratings, according to a proposal sent by WikiFX to a broker seen by DL News.
The broker makes an “integrity deposit” with WikiFX, payable monthly, quarterly or annually, per country.
A sales presentation seen from DL News He said it costs $128,100 to display positive reviews to users in Thailand, Indonesia, Malaysia and Vietnam for a year.
Paying this deposit results in a higher rating on the site, company documents show. The legal assistance program also promises to compensate investors if the “broker encounters any problems[s].”
Improve your scores
A company called Bull Sphere improved its score to 7.06 from 1.41 in Thailand after joining the program, according to a case study provided by WikiFX to a broker. (Bull Sphere’s score dropped back to 1.51.)
WikiFX is quick to find novice brokers and hit them with bad reviews and low scores before reaching out and offering to help them improve their scores, said Baumgart of Atomiq Consulting.
“In the meantime, they will take a legitimate broker and flood their WikiFX page with fake negative reviews,” he said.
Warnings for investors
For its part, WikiBit appears to be pursuing a similar approach by targeting cryptocurrency investors looking for a way to tap into a market where scams abound.
WikiBit gives the highest scores to platforms flagged as dangerous by organizations that monitor cryptocurrency companies in Asia.
For example, an exchange called Enhance Pro was cited by the Global Anti-Scam Organization, a nonprofit group dedicated to preventing cryptocurrency fraud, as “scam site” that investors should avoid.
Enhance Pro did not respond to a message DL News sent to the support email address.
The anti-fraud organization warned investors about at least two other exchanges that WikiBit had rated highly: TDSR Exchange and Helioj Exchange. (In mid-June, Helioj Exchange’s rating dropped from 7.86 to 3.1 and it disappeared from the rankings.)
The two companies did not respond to a request for comment.
Meanwhile, Ken-Ex, a new cryptocurrency exchange listed on WikiBit, claims to be backed by several large cryptocurrency venture capital funds.
But none of the VCs list Ken-Ex in their portfolios. A representative of KuCoin, one of the listed investors, said DL News the company hadn’t heard of Ken-Ex.
Yet Ken-Ex scored 7.83 on WikiBit. Ken-Ex did not respond to a request for comment.
All of these exchanges have one thing in common: they advertise on WikiBit.
Callan Quinn is DL News’ Asia Correspondent based in Hong Kong. Contact us at callan@dlnews.com.