Beware! MegaTradeFX is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
MegaTradeFX is a Forex brokerage registered in the Marshall Islands. It provides а web-based trading platform, not the MT4 trading terminal, and an extremely generous leverage of up to 1:200. Furthermore, there is a wide range of trading products from which to choose and a required minimum deposit of $250 which is about the industry average. The spread on EUR/USD is about 3.7 pips which is quite high in our view and unfavorable for traders.
MegaTradeFX regulation & safety of funds
According to the website the company behind the brokerage is registered in the Marshall Islands by the name Vital Resources LTD. The Marshall Islands is a favorite destination for would-be scammers due to its very liberal laws regarding the registering of companies. The government does not even require for someone to be physically there in order to register a company. Such a loophole has surely been noticed by many ill-minded brokers and utilized. Furthermore, while researching the brokerage we came upon an official warning issued by the UK’s Financial Conduct Authority. It reads that MegaTradeFX does not hold a proper license and is suspected to be involved in fraudulent activities. Here is a screenshot:
Being blacklisted is perhaps the most clear-cut sign of trouble. Furthermore, It’s safe to assume that the brokerage does not fall under any regulatory oversight because the government of the Marshall Islands does not include Forex trading within its regulatory framework. Another telling sign is the absurdly high leverage which may only be offered by brokerages that are registered offshore.
Through a demo account we could see a spread of 3.7 pips on EUR/USD which is quite high and unfavorable. Having that in mind, the offshore location of the brokerage and the obvious lack of regulation highly inclines us to suspect that potential clients of the brokerage may be open to substantial risk.
We urge traders to exclude such risk in trading by only associating with brokers regulated by prestigious regulatory agencies, such as the FCA and CySec, which require compliance with a number of strict rules that give significant assurance for the security of the clients funds.
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 swindle traders.
MegaTradeFX deposit/withdrawal methods and fees
Potential clients of the brokerage may deposit or withdraw via a number of payment methods. They include: Visa, MasterCard, Maestro, wire transfer, Skrill, Neteller and Fasapay. We did find some worrisome provisions in the terms and conditions of the brokerage. MegaTradeFX has a minimum withdrawal amount of $50 which is quite unsavory and shouldn’t figure among the conditions of a legitimate brokerage.
This is why we always advise traders to put up only the required minimum deposit, instead of risking a bigger amount with no certainty. Afterwards, they may also try to withdraw a small amount in order to check for any unexpected fees or delays. Such fees and delays are usually the signs of a scammer.
How does the scam work?
Unfortunately, the possibility of a scam looms over almost every trade in forex, especially if you are dealing with an unregulated brokerage. That is why we believe traders should be acquainted with the methods of a scam. Here is how it would typically go about:
Through clicking an ad with promises for fast money, you will be redirected to a website such as Bitcoin Evolution or Crypto Cash where registration will require you to give your address, email and phone number. After sharing your personal information, you will being receiving calls from brokers, compelling you to invest with them and win big. After a few minutes hearing their pitches, you decide to deposit some $200-250. And just like that – the scammers take a fat commission from this initial deposit.
After they are done with you, senior scammers begin working you into putting even more money. They say it’s the only way to profit from trading even more. After making the mistake of investing even further, you’ll begin wanting to get out of this and withdraw what you have left.
Unfortunately, the con-artists have no such thing in mind. They will now begin persuading you to wait it out and not withdraw right now. The motive here is quite straightforward – traders have a limited time window for filing a chargeback with their bank and get their money back. The “recovery department” will simply want to mislead you into missing this crucial period and, along the way, losing any chance you might have of getting the money back.
What to do when scammed?
As was mentioned above, scamming is quite the common in the trading world and, sadly, even you might suffer from it. In such an unfortunate case there still may be some available options for you.
You may contact your bank or credit card provider and file a chargeback. Furthermore, due to the high instances of fraud – both Visa and MasterCard have decided to sidestep scammers as best they can in Forex trading. The first thing we have seen so far is that MasterCard has increased the previous time period of six months for filing a chargeback to a year and a half with their rival Visa expected to follow suit in December.
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 switch it asap!
Beware of potential calls from self-described “recovery agencies”! They prey on scammed and vulnerable traders who are desperate to recover their losses. They will require an “up-front” payment to help you, but after paying them, no such help will be coming your way!
