Beware! DaxMarkets is an offshore broker! Your investment may be at risk.
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DaxMarkets is Forex brokerage presumably registered in Singapore. It provides the MetaTrader4 trading platform and an extremely low leverage. Traders are extended only a leverage of 1:2. Furthermore, there is a wide range of trading products from which to choose and the required minimum deposit stands at $500 which is quite high in Forex trading.
DaxMarkets regulation & safety of funds
The company behind the brokerage is registered with the name – 3D-Capital LTD. However, we are not sure about the country of origin, there are many companies by that name but non of them hold a license for Forex trading. Furthermore, going on the online registry of the Singapore main regulatory body – Monetary Authority of Singapore (MAS) – we found no mention of such a company. We can safely conclude that the brokerage is not monitored by any regulatory body. A lack of regulation always means trouble and unnecessary risk for traders because in case of fraud they have no authority for complaints, nor access to any sort of financial compensation scheme.
However, in order to be impartial – the brokerage does in fact offer the MetaTrader4 platform which is the foremost trading terminal at the moment and it also provides clients with a test-drive.
However, we could not see the trading conditions offered by DaxMarkets because there is no demo account available. Furthermore, reading the website we learn that the maximum leverage extended to clients is just 1:2 which is low even by the standards of the European regulators. Usually unregulated brokerages provide spreads as high as 1:500 in order to compete with the legitimate firms that comply with the newest cap on the leverage. The cap on the maximum allowed leverage in Europe is 1:30 at the moment. Such restrictions have even forced some brokerages in the UK – such as Abshire-Smith – to cease operations.
Having in mind all that was outlined above – we suspect potential clients may be exposed to a number of risks.
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.
DaxMarkets deposit/withdrawal methods and fees
In the brokers terms and conditions we did find worrisome withdrawal conditions. Here is a screenshot:
DaxMarkets has a minimum withdrawal amount of $50. Such a provision is unfavorable for traders and only speaks about the ill-minded intentions of the brokerage. A minimum withdrawal amount isn’t a provision you’ll come across while doing business with a legitimate brokerage.
This is precisely why we always remind readers of all the ways a trader may test the brokerage’s intentions. Firstly, traders are advised to always 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?
Besides judging the brokerage beforehand through the info given on its website, a valuable piece of information in the trading world would be precisely how a scam would go about. Here is a description of the typical three steps:
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. The growth of scammers that are spawning everyday in forex trading has forced both financial services giants Visa and Mastercard to step up and take action. MasterCard has already increased the previous time period of six months for filing a chargeback to a year and a half, effectively bypassing the “recovery department” part of the scam, and its rival Visa will follow suit in December.
If, however, you have provided the broker with your credit card number and CVV code, 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!