The Capital Market Development Authority (CMDA) has stated that while it holds legal responsibility to investigate scams, its ability to take action is constrained by a lack of enforcement powers.
In comments made during a recent appearance on state media, CMDA’s CEO Mohamed Hussain Maniku explained that the authority’s mandate is limited to cases involving securities. Under current laws, scams that fall outside this category do not come under CMDA’s jurisdiction. He also pointed to existing legal loopholes that are being exploited by scammers, resulting in significant financial losses for the public.
CMDA reiterated the importance of public awareness and advised against investing with unregistered companies. The agency emphasised the need for stronger collaboration with enforcement bodies such as the police to address fraud more effectively.
These concerns come as authorities continue to investigate the collapse of Gemcue (GMCE), a pyramid scheme that reportedly drew in over 41,500 investors in the Maldives. According to the Anti-Scam Centre of the Maldives Police Service, more than a million dollars is believed to have been invested in the scheme.
The police revealed that much of the money involved had been converted into cryptocurrency before being deposited into the GMCE platform, significantly reducing the chances of recovery.
In light of the growing prevalence of such schemes, Parliament’s Committee on Information Communication Technology has announced a formal inquiry into pyramid schemes, scams, and online gambling platforms.
CMDA has called for urgent legal reform and stronger regulatory mechanisms to protect the public from financial fraud.
