Beware! This is an offshore broker! Your investment may be at risk.
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
SternMarkets is a CFD brokerage, based in the Marshall Islands, which focuses on crypto-currencies. It provides its own web-based trading platform and clients may open only one type of trading account with a minimum deposit of $250. The spread on BTC/USD is $200 which is pretty extreme and in no way in favor of the trader. Especially compared to the industry average which comes at about $50.
SternMarkets regulation & safety of funds
SternMarkets is owned by the company GUM Ltd. The given registered address gives us good reason to question the brokers purported legitimacy, since it is an address used by a number of other brokers who are proven scammers. Furthermore, regulation is lacking and SternMarkets figures among the “black list” of German financial watchdog BaFIN which is an unambiguous red flag in the trading world.
The segregation of accounts is among the rules which are especially important in the trading world, because it drastically lowers the risk of possible commingling.
Another is the participation in a compensatory scheme by which the client’s losses will be covered in the unlikely case the broker goes bankrupt or attempts to scam traders.
SternMarkets deposit/withdrawal methods and fees
Potential clients of the brokerage have a wide variety of payment methods from which to choose. They may withdraw or deposit funds via MasterCard, Skrill, Maestro, Visa and bank/wire transfer. There is a procession fee of $5 on wire transfers and 3.5 per cent fee on withdrawals via cards.
How does the scam work?
Information is a pretty solid criteria for judging a brokers legitimacy. Scammers are hesitant to disclose a lot of information, because precisely there they are the most vulnerable and prone to unmasking. A valuable piece of information is precisely how a scam would go about. Here is a description of the typical three steps:
In most cases through clicking a tempting ad with promises for quick and easy profits, you will be redirected to a website like The News Spy where registration will require you to give your address, email and phone number. Your personal information will be immediately shared with brokers in call centers who are just waiting for fresh leads. After a few minutes on the phone listening to the whole prepared brokers pitch , you decide to deposit some $200-250. And just like that –a 25 per cent commission gets wrested from the initial deposit by the broker on the phone.
After stinging you for a few hundred bucks, senior scammers will take you up and begin pushing you to further invest. You may even budge and continue investing. At this point, regardless whether you are in the red or not, you probably begin to consider closing the account and getting back your money.
However, now comes the “recovery” part of the scam. After stating that you wish to withdraw your money, it will be high time for the “recovery people” to take it from here. They will begin further stalling in any way possible. The angle here is simple – remove the last guard you may have – filing a chargeback with your bank. This options expires for good after six months or more have passed since the initial deposit.
What to do if scammed?
A scam could happen to anyone, including you, and, in such a case, it would be best to know what options are still available to you. That way you’ll be certain your reaction will be adequate and on spot.
You may contact your bank or credit card provider and file a chargeback, but only within six months of the initial deposit, as was noted above.
If however you have provided the broker with your credit card details, immediately cancel your credit card.
If you have given information regarding your online banking pass – you should change it asap!
So-called “recovery agencies” should not be trusted! Such agencies target scammed and vulnerable traders in an attempt to further swindle them into giving away their money. They will require from you an “up-front payment” in order to get your money back, but no such thing will happen!