The online trading industry has experienced a shock in recent days. Apple announced that it would remove the MetaTrader trading software from its App Store (report here). This news came after Forbes reported that Pig Butchering scammers use MetaTrader. Forbes rightfully pointed out that MetaTrader is open to manipulation by operators via plugins. This has been known for a long time. And what about their data strategy? It’s time for the authorities to look closely at MetaTrader and its publisher, MetaQuotes.
Scams Powered By MetaTrader
MetaTrader is licensed to brokers who provide the software to their clients. The software consists of a client and server component. The server component is run on the broker side, the client is provided to the broker’s customers to see live streaming prices and charts, place orders, and manage their accounts.
It is a fact that 9 out of 10 online trading scams work as white-label solutions with MetaTrader, which is integrated into many brokerage platform providers like PandaTS as a client solution.
Using the manipulation possibilities offered by MetaTrader via APIs and plugins, scammers can present their victims with a deceptively legitimate trading environment. It all looks real and honest to the victims. In reality, however, the trades can be manipulated by scammers.
The manipulation of trading software has already been a topic in the trial against the convicted Israeli scammer Gal Barak. In a written statement to the court, Gal Barak admitted that trades were manipulated via PandaTS – with MetaTrader clients – used by his scams. Barak urged authorities to search PandaTS offices in Israel and Cyprus. This is what happened.
Issues For Regulators And Law Enforcement
The core of the problem is that broker platform providers such as PandaTS offer to build turnkey broker solutions, including payment solutions, without the clients having a permit or license to offer financial services. Anybody, including scammers, can open a brokerage with PandaTS within 30 days, MetaTrader clients included.
As long as manipulation-prone financial software like MetaTrader is free and easy to download via Google and Apple, scammers have a clear path to attack naive consumers.
The MetaTrader Story
In its essence, MetaTrader is a Russian project. The software was initially developed in Russia some 20 years ago. It has been rolled out through companies in the Bahamas, the US, and Europe. In 2003, according to filings with the US SEC, Renat Fatkhullin (LinkedIn) filed a corresponding patent with the Russian Patent and Trademark Office (Rospatent).
Renat Fatkhullin is still CEO of Metaquotes Group and director of MetaQuotes Ltd in Cyprus. The MetaTrader trademark was first registered through MetaQuotes Software Corp in the Bahamas and then transferred to MetaQuotes Ltd in Cyprus. Who the beneficial owners of MetaQuotes Group are besides Renat Fatkullin is unknown.
The Financial Data Giant And Russia
Like all software and app providers, MetaQuotes will collect and analyze data from the tens of millions of MetaTrader users and MetaTrader brokers. Where does the data go? What will they be used for? We don’t know! It’s an unregulated private company in Cyprus. Who cares? However, given MetaQuotes‘ proximity to Russia, their data strategy seems to be of utmost importance. We are talking about billions of money movements and investments of consumers and brokers worldwide.
MetaQuote‘s Russian activities have not decreased even during the Western sanctions against Russia. In August 2022, more than 20% of MetaQuote‘s website visitors came from Russia (Similarweb statistics); an increase of more than 107% compared to July 2022.
In April 2022, the company announced the acquisition of the Russian news portal SearchEngines.ru, and the Searchengines.guru forum, dedicated to search engine optimization and Internet marketing.
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If you have any information about MetaTrader, MetaQuotes, and their activities, please let us know through our whistleblower system, Whistle42.
