Authorities Warn Public Against Unregistered Investment Services

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

In its statement issued on Monday, the CMDA stated that some individuals in the Maldives are offering opportunities to buy and sell investment products and promising returns without holding the necessary licences. These activities contravene the Maldives Securities Act, which requires anyone providing investment advice, fund management, or operating investment funds to be licensed by the CMDA.

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The authority stressed that offering fund management or investment advisory services without registration is illegal and urged the public to exercise caution, particularly when approached through social media platforms. It advised investors to verify whether a fund or advisor is registered with the CMDA before making any financial commitments. A list of licensed entities is available on the CMDA website, and the public is encouraged to report unlicensed activities via email to compliance@cmda.gov.mv.

The Maldives Police Service also warned that unauthorised investment schemes have previously caused substantial financial losses. One such example was the GemQ Investment Scheme (GMCE), a pyramid scheme launched in June 2024. Despite early profits, the scheme’s collapse resulted in heavy losses for many investors, including over 40,000 from the Maldives.

The CMDA explained that pyramid schemes operate through continuous recruitment rather than through the sale of genuine products or services, and that they ultimately fail once the recruitment of new participants slows.