New Zealand's Financial Markets Authority (FMA) has issued an alert about an elaborate investment scam operating through WhatsApp that promises unrealistic returns while employing sophisticated social engineering tactics to defraud investors.

Recent survey data from FinanceMagnates.com and FXStreet found that approximately 60% of traders targeted by scammers on platforms like WhatsApp and Telegram end up losing money.

FMA Warns of WhatsApp Investment Scam Targeting New Zealanders

The scam, linked to an entity called "Txex" (also known as Whalefall), operates through multiple websites and uses WhatsApp groups populated largely with fake, artificial agents to create the illusion of popularity and legitimacy, according to the FMA warning.

"We have identified multiple websites that are part of this scam but believe there may be more connected as they frequently change,” the FMA commented in the official press release. “The scammer sets up a series of WhatsApp groups, these appear popular, but are mostly filled with bots.”

The scheme operates by establishing WhatsApp groups led by self-described mentors, coaches, or crypto advisers who promise 100% returns through "trading signals" shared throughout the day. Users are encouraged to recruit others with rewards, while fraudulent leaderboards display supposed top performers receiving luxury prizes.

Trail of Empty Wallets Across New Zealand

Victims are directed to open cryptocurrency exchange accounts, deposit funds, and then transfer their cryptocurrency to what scammers describe as a "trading account." While initial small trades may appear successful to build confidence, attempts to withdraw funds are met with demands for substantial fees, which are never returned even if paid.

The FMA has identified over 30 websites connected to the operation, including variations of txex.com with different domain extensions, and warned that new sites are frequently created as others are reported.

The FMA advises anyone who believes they've encountered the scam to immediately cease contact with the operators, report the group to WhatsApp, and block the scammers on all devices. Victims are also encouraged to report spam messages to New Zealand's Department of Internal Affairs and seek support from trusted friends, relatives, or Victim Support services.

Two months ago, the regulator also identified almost 100 fraudulent trading platforms, including clones of the popular brands like SAXO, IG and ATFX.

The WhatsApp Trap

This warning comes amid growing concerns about financial scams spreading across messaging platforms. FinanceMagnates.com conducted a survey last year in collaboration with FxStreet, which revealed that WhatsApp, along with Telegram, is among the most common social media platforms where investors are scammed and lose money.

“I would encourage any trader not to rely solely on a social media post or a conversation with a potential provider, but instead to insist on reviewing the documentation that supports their claims,” David Harvie, Head of Direct Sales at Saxo Australia, told Finance Magnates. “You also have the opportunity to check your jurisdiction’s regulatory website to confirm whether your broker is properly licensed.”

Other regulators have also recently warned about scams on WhatsApp, including Consob, which identified the app as one of the most popular current channels for investment fraud. In late 2024, Australia’s ASIC issued a separate alert, highlighting the rise in WhatsApp groups promoting alleged investment opportunities with potentially high returns.