Trading and Crypto Scam in Saudi Arabia: What to Do Now

You deposited SAR 25,000 on a trading platform you saw advertised on Snapchat, and today your screen shows profits of more than SAR 60,000. You pressed “withdraw”, and you were asked to pay SAR 6,000 as a “release fee”. This is where you stop.

The direct answer: if you are asked to pay so you can withdraw your own money, you are most likely facing fraud, and every new transfer is an extra loss. Stop transferring, tell your bank immediately, save the chats, account numbers and wallet addresses, and then file a report stating the amount you claim. Taking money through lies or creating a false belief is a crime under Article 1 of the Anti-Fraud and Breach of Trust Law, punished by up to seven years in prison and a fine of up to SAR 5 million, or one of them.

How does a trading scam usually start?

You see an ad on social media promising fixed daily profits from trading cryptocurrency, gold or foreign shares. You click the link, and someone contacts you introducing himself as an investment adviser and asks for a small amount to start. A few days later you see attractive profits on the screen, so you add a larger amount.

The problem appears when you try to withdraw. Suddenly you are asked to pay a release fee, a tax, or an amount to unfreeze the account. Each payment opens the door to a new request, until the adviser disappears or your account on the platform is closed.

This picture repeats in different forms, but the signs are similar:

• A promise of guaranteed profit or a fixed percentage that does not change with the market.
• Contact only through chat apps, with no clear address or office you can visit.
• A request to transfer money to an individual's account or a digital wallet, not to an account in the company's name.
• Constant pressure: “the offer ends today”, “an opportunity that will not come again”.
• Fees demanded before you can withdraw any of your profits.

When is what happened to you fraud under Saudi law?

Article 1 of the Anti-Fraud and Breach of Trust Law punishes anyone who takes another person's money without right through one or more acts involving any fraudulent method, and the text expressly mentions lying, deception and creating a false belief. The penalty is imprisonment of up to seven years and a fine of up to SAR 5 million, or one of them.

The key point is that a loss alone is not enough. If you traded in a real market and lost because prices fell, that is investment risk, not fraud. But if you were made to believe in trading that never happened, or in fake profits on a screen, in order to take your money, you are facing exactly what the text deals with.

Liability does not stop with the person who spoke to you. Article 3 punishes anyone who incites, agrees to or assists the crime, if it takes place as a result, by up to the maximum penalty, and by up to half of it if the original crime does not take place. This may include someone who hands over his bank account to pass victims' money through. An attempt alone is also punished, by half the maximum, under Article 4.

If the crime is committed through an organised gang, or the offender is a repeat offender, Article 5 makes the penalty no less than half of its maximum and no more than double it.

Where do the Capital Market Law and the Anti-Cyber Crime Law come in?

The Royal Decree that issued the Anti-Fraud Law states that the law does not apply to fraud acts covered by the Capital Market Law, which are governed by that law. So if the fraud is connected to securities regulated by the Capital Market Law, its provisions may be the ones that apply instead of the Anti-Fraud Law.

What counts as a security? Article 2 of the Capital Market Law lists them: transferable company shares, tradable debt instruments, investment fund units, instruments representing rights to profits or to a distribution of assets, and other rights and instruments the CMA Board decides to include. Cryptocurrencies are not on this list by name, so taking your money by making you believe you are trading them remains, in principle, under the Anti-Fraud Law. A platform that offers to trade shares or funds for you, or to manage your portfolio, is carrying on securities business regulated and supervised by the Capital Market Authority (Article 5).

In August 2018 a permanent government committee for awareness against unlicensed Forex trading, chaired by the Capital Market Authority and including the Saudi Central Bank (SAMA) and the ministries of interior, media and commerce, warned that virtual currencies such as Bitcoin are not approved currencies in the Kingdom, and that claims by promoting websites to be licensed by official Saudi authorities are untrue. If you are told a platform is “licensed in Saudi Arabia”, ask for the licence number and check it yourself.

If the money was taken over the information network, Article 4 of the Anti-Cyber Crime Law punishes anyone who takes movable property for himself or others through fraud, using a false name or claiming a false capacity, with up to three years in prison and a fine of up to SAR 2 million, or one of them. When both laws apply, Article 9 of the Anti-Fraud Law applies the harsher penalty.

What to do from the first hour

1. Stop any new transfer, whatever reason you are given, whether it is called a fee, a tax or insurance.
2. Contact your bank immediately through its official channels, report the suspicious transfers and ask what can be done about them.
3. Save everything: the full chats, the account numbers you transferred to, transfer receipts, the platform link, digital wallet addresses, and any screenshot of the profits screen.
4. Do not delete the app or the chat before saving them, and do not tell the fraudster what you plan to do.
5. Check the platform's licence yourself: the Capital Market Authority (CMA) publishes the names of firms licensed for securities business on its official website. Do not rely on a certificate the adviser sent you.
6. File a report with the competent security authority, attaching what you collected in date order. Investigation and prosecution of these crimes belong to the Public Prosecution under Article 10 of the Anti-Fraud Law.

Watch out for a second wave that often comes after the loss: messages from people offering to recover your money for an upfront fee. Many of these offers are part of the same fraud, so treat them with the same caution.

Will you get your money back?

No one can promise you that in advance. Article 6 of the Anti-Fraud Law provides that the tools and equipment used in the crime and its proceeds are confiscated by court judgment, without prejudice to the rights of third parties acting in good faith. You can still claim your private right to your money within the case; the Law of Criminal Procedure treats a complaint from the person harmed by the crime as a claim for his private right, unless he expressly tells the investigator that he gives it up.

In practice, the result depends on how fast you report, where the money is, and whether it has been moved to several accounts or outside the Kingdom. This is why every hour before the report has a cost.

Saad transferred money in three payments, SAR 15,000, then SAR 30,000, then SAR 8,000 as an “unfreezing fee”, to three different personal accounts.

He told his bank on the day of the last payment and filed a report with a table of dates, amounts and beneficiary names, claiming the full SAR 53,000.

The last account still had a balance that had not been withdrawn, while money had been moved out of the first account on the same day. This is why what is recovered differs from case to case, and the difference is usually the speed of the report.

The judgment may also order a summary of it to be published at the convicted person's expense once it is final, depending on the type and seriousness of the crime, as Article 7 provides.

Before you transfer a single riyal in any investment opportunity

A few questions protect you from most of these situations. Who will receive my money, and is the account in the company's name or a person's name? If it offers trading in shares or funds, is it licensed by the Capital Market Authority, and have I checked that myself on the official source, not through a link they sent me? Can I withdraw a small amount before I add more? Am I being asked to keep it secret or decide right now?

If you cannot answer any of these questions, stopping costs much less than trying to recover the money later.

This is general information based on the official Arabic texts of Saudi laws, which prevail over any translation. It is not legal advice for your specific case.

Practical solutions for both sides

If you fell for a trading or crypto scam:

• Stop any further transfer, even if they ask for a “withdrawal fee” or “tax”.
• Put the platform links, chats, wallet addresses and transfer receipts in one file, in date order.
• Tell your bank on the same day, then file the official report stating the amount you claim.
• Beware of “money recovery companies” that ask for upfront payments.

If you provide investment services and face an accusation:

• Provide proof of your licence, the nature of the service and the contracts signed with the client.
• Document your risk disclosure to the client and the actual trading statements of his account.
• If your bank account was used to pass money whose source you do not know, do not withdraw any of it, and provide proof of your connection to the transfer.
• Get advice before giving any statement, because carrying on financial business without a licence has its own rules.

In these cases a single day makes a difference. Send us the platform name and the transfer receipts on WhatsApp, and we will review them with you and organise what your report needs.