For years, an Asian company called WikiFX has pushed the boundaries in the region’s titanic currency trading industry.
WikiFX isn’t a broker or a trading shop in the foreign exchange, or forex, market. Rather, it reviews and rates brokerages for investors like Trustpilot.
And it doesn’t play nice.
WikiFX strongarms brokerages into signing up for its programme or else they get slapped with negative reviews, according to company documents obtained by DL News and business people who have dealt with the company.
‘If you pay them off they will erase all negative complaints.’
Jonathan Baumgart, Atomiq Consulting
Jonathan Baumgart was one of them.
The CEO of Atomiq Consulting, a consultant to currency brokerages, said he built a website for a client that caught the eye of WikiFX.
“Suddenly on WikiFX there were reviews of my company despite the fact it was a simple website template,” he told DL News.
“If you pay them off they will erase all negative complaints so with some money you can make a scam broker appear legit,” he said.
Now its sister company, WikiBit, has set its sights on crypto.
Looking for clients
A self-styled “global blockchain supervision and query platform,” WikiBit says it has 10 million users in 170 countries and regions.
And it is looking for more clients.
In May, another affiliated company, WikiEXPO, organised a splashy event at the top of Hong Kong’s tallest building for hundreds of attendees. Admission was free. Another conference took place in Tokyo on June 22 and yet another is scheduled for Bangkok in September.
WikiEXPO’s speaker roster includes leaders in the crypto space 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 marks to crypto platforms that have been cited as potential scams by watchdogs, a DL News investigation found.
The company also exaggerates the regulatory bona fides of companies who happen to advertise on its site.
Representatives of WikiFX and WikiBit did not respond to DL News’ numerous requests for comment.
Hong Kong crackdown
The Wiki group is ramping up its operations just as Hong Kong, China, and other Asian nations are beginning to introduce licensing regimes to bring order and transparency to the industry.
In 2023, investors lost US$400 million to crypto fraud in Hong Kong, according to police officials. Rogue exchanges are responsible for much of the losses.
JPEX, for example, vanished last year with an estimated US$200 million, police say. Even though law enforcement officials have made dozens of arrests, they’ve not filed any charges or identified who owns JPEX.
‘A sales pitch seen by DL News stated that it costs $128,100 to have positive reviews shown to users.’
As for who or what is behind WikiBit, that’s a bit fuzzy.
WikiBit is one of a number of linked enterprises with the word ‘Wiki’ in its name. Its website features links to WikiFX, WikiEXPO and a unit called WikiResearch. The WikiEXPO site has a link to WikiFX’s app. And WikiEXPO’s privacy policy refers to WikiFX.
On its site, WikiEXPO said it was established in 2019 as part of a “financial vertical media” business. (The group is not connected to Wikipedia.)
The business 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 the north of China.
Indeed, WikiFX references the “relevant laws and regulations of the People’s Republic of China” in its service agreement. WikiBit’s terms of use refer to disputes being “subject to the jurisdiction of Chinese courts” and gives an address in Shanghai.
But there are also references to a headquarters in Singapore and Hong Kong.
In a LinkedIn message, Loki Sou, WikiEXPO’s COO, declined to comment on behalf of his firm, as well as WikiFX or WikiBit.
‘Integrity deposit’
As convoluted as the Wiki group may be, at its heart lies a simple business — online reviews. The model appears to have been developed at WikiFX, the forex business. The venture lists 49,000 forex brokers, according to its website.
The idea behind WikiFX was providing a guide for retail forex traders in China who wanted to avoid scams. WikiFX researched the corporate filings of companies to determine if they were legitimate. The platform is followed closely on Chinese-language forex forums.
In some cases, the firm sent agents to determine if a physical office actually existed, according to articles published on its site.
When WikiFX gave poor reviews to companies it also offered them a solution.
Under its “legal aid programme,” the firm asked brokers for money to improve their score, according to a proposal WikiFX sent to a brokerage seen by DL News.
The broker makes an “integrity deposit” with WikiFX — to be paid monthly, quarterly, or annually — on a per-country basis.
A sales pitch seen by DL News stated that it costs $128,100 to have positive reviews shown to users in Thailand, Indonesia, Malaysia, and Vietnam for one year.
Payment of this deposit results in a higher score on the site, company documents show. The legal aid programme also promises to compensate investors if the “broker runs into any problem[s].”
Improving scores
A company called Bull Sphere improved its score to 7.06 from 1.41 in Thailand after buying into the programme, according to a case study WikiFX gave to a brokerage. (Bull Sphere’s score has dropped again to 1.51.)
WikiFX is quick to find fledgling brokerages and hit them with negative reviews and low scores before reaching out and offering to help them improve their score, Atomiq Consulting’s Baumgart said.
“Meanwhile, they’ll take a legit broker and flood their WikiFX page with fake negative reviews,” he said.
Investor warnings
For its part, WikiBit appears to be pursing a similar approach by catering to crypto investors looking for a way to access a market where scams are plentiful.
WikiBit gives top marks to platforms that have been flagged as dangerous by organisations that track crypto firms in Asia.
For example, an exchange called Enhance Pro has been cited by the Global Anti-Scam Organization, a non-profit group committed to preventing crypto fraud, as a “scam website” that investors should avoid.
Enhance Pro did not respond to a message DL News sent to its support email.
The anti-scam organisation warned investors about at least two other exchanges WikiBit had highly scored: TDSR Exchange and Helioj Exchange. (In mid-June, Helioj Exchange’s rating dropped to 3.1 from 7.86 and it disappeared from the rankings.)
The two firms did not respond to a request for comment.
Meanwhile, Ken-Ex, a new crypto exchange featured on WikiBit, claims it’s backed by several large crypto venture capitalist funds.
But none of the VCs list Ken-Ex in their portfolios. A representative from KuCoin, one of the listed investors, told DL News the firm hadn’t heard of Ken-Ex.
Yet Ken-Ex garnered a score of 7.83 on WikiBit. Ken-Ex did not respond to a request for comment.
All these exchanges do have one thing in common — they advertise on WikiBit.
Callan Quinn is DL News’ Hong Kong-based Asia Correspondent. Get in touch at callan@dlnews.com.
