CMDA warns against unregistered investment services

The Capital Market Development Authority (CMDA), in collaboration with the Maldives Police Service, has issued a public advisory urging investors to avoid engaging with unregistered investment services.

In a statement released Monday, the CMDA revealed that certain individuals in the Maldives are offering opportunities to buy and sell investment products and promising financial returns, without holding the required licenses. These activities violate the Maldives Securities Act, which mandates that anyone providing investment advice, fund management, or operating investment funds must be licensed by the CMDA.

The authority emphasized that it is illegal to offer fund management or investment advisory services without CMDA registration. It also reiterated its call for public vigilance, especially when approached through social media platforms.

Investors are advised to verify whether a fund or advisor is registered with the CMDA before committing any money. A full list of licensed entities is available on the CMDA website. The public is also encouraged to report any unlicensed services via email to [email protected].

The Maldives Police Service echoed the CMDA’s warning, noting that unauthorized schemes have caused significant financial losses in the past. One example is the GemQ Investment Scheme (GMCE), a pyramid scheme launched in June 2024. Despite initial profits, many investors, over 40,000 from Maldives, suffered major losses when the scheme collapsed.

The CMDA clarified that pyramid schemes rely on continuous recruitment rather than the sale of actual products or services. Once new member intake slows, such schemes inevitably fail.