Summary of this article
Sebi launches “Verified” badge on Google Play to identify genuine trading apps
Over 1.3 lakh misleading posts flagged; 66 fake apps removed
Scammers use lookalike apps and fake promises to steal investor money
The Securities and Exchange Board of India (Sebi) on March 25 introduced a new investor protection step by launching a ‘Verified’ label for stock trading apps of Sebi-registered brokers on the Google Play Store.
This initiative comes at a time when fraudulent trading apps are on the rise, often mimmicking the look and feel of genuine platforms to fool retail investors.
"The proliferation of fraudulent trading apps has posed a serious threat to retail investors, with scammers impersonating genuine apps that eventually deceive gullible investors into believing that their investments made through such fake apps are directed to the regulated securities market," the regulator said in a statement.
To tackle the issue, Sebi partnered with Google to introduce a “Verified” badge on the Google Play Store. This label will appear on stock trading apps run by Sebi-registered entities, making it easier for investors to identify genuine platforms and avoid fake ones. The regulator added that the feature will later be expanded to cover apps of other intermediaries as well.
Speaking at the launch, Sebi Chairman Tuhin Kanta Pandey said that Sebi has asked Google to leverage artificial intelligence (AI) tools to track “finfluencers” who transgress regulations and promote dubious schemes.
"We must develop tools according to our laws and regulations which will help kick such people out of the cyber space, which they are destroying through social media platforms and creating so much of a problem for the community," he said.
Pandey said Sebi has already flagged more than 1.3 lakh instances of misleading investment-related content for takedown across digital platforms, and has also identified around 66 fake trading apps, which have since been removed from app stores.
Over 600 Trading Apps Verified
More than 600 stock trading apps have already been verified under the new system, said Aditya Swamy, managing director at Google Play. Pandey said the initiative is part of a broader effort to "build safeguards in place before any harm occurs", instead of acting only after fraud has already taken place.
He added that the regulator has also introduced an application programming interface (API)-based mechanism to ensure that only authorised and registered intermediaries can run ads on Google and Meta platforms.
The regulator also plans to sign a memorandum of understanding with the Ministry of Electronics and Information Technology (MeitY) and the Department of Telecommunications (DoT) to improve coordination in tackling digital scams.
How Fraudsters Scam Investors Through Fake Trading Apps
Fraudsters lure investors with promises of assured or unusually high returns, often using social media or messaging platforms to build trust. They then convince investors to download apps that look almost identical to those of Sebi-registered brokers, making them appear legitimate.
Once money is transferred through these apps, investors believe they are investing in the market, but the funds are actually diverted. By the time suspicion arises and investors realise something is wrong, the money has already been lost.
