Beware! CPTMarkets is an offshore broker! Your investment may be at risk.
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CPTMarkets is a forex brokerage registered in Belize. According to the brokerage clients are extended an extremely generous leverage of up to 1:500. Furthermore, there is wide range of trading products from which to choose and a required minimum deposit of $250 which is just about the industry average. The brokerage provides the MT4 trading terminal and on it we could see a spread of 2 pips on EUR/USD which is a bit above the industry average of a pip and a half.
CPTMarkets regulation & safety of funds
CPTMarkets is part of the trading group Tahoe Group International Limited (TGIL) which is registered in the Republic of Belize. We further find that the company is licensed and regulated by the local International Financial Services Commission (IFSC). Forex brokerages in Belize have to guarantee legitimacy by having at least $500 000 in starting capital. However, even though a license by the IFSC is better than nothing, it still does not carry the same weight in Forex trading as a license by the Financial Conduct Authority in the UK or CySEC in Cyprus
Nonetheless, the brokerage does provide clients with the MetaTrader 4 trading terminal which is the preferred trading terminal of over 80 percent of traders in Forex. Furthermore, through a demo account for the trading platform we could see a very generous leverage of 1:500 as well as a spread on EUR/USD of 2 pips which, however, is a bit above the industry average of a pip and a half ant not very favorable for traders. CPTMarket also provides clients with another platform – ClearPro – however, no test-drive is extended to clients for the custom platform.
The lack of adequate regulation, as well as the high spread inclines us to believe that there are better trading options for clients in Forex trading. Most importantly – brokerages that are licensed and regulated by world-known regulatory agencies such as the FCA or NFA.
We urge traders to exclude all 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.
CPTMarkets deposit/withdrawal methods and fees
Potential clients of the brokerage may deposit or withdraw only via China UnionPay. We view this as a big disadvantage since most brokerages in Forex trading at least extend clients the possibility of investing and withdrawing via the standard Visa or MasterCard.
We couldn’t find any withdrawal conditions or provisions worth noting, however, that is no guarantee that the brokerage wont’ charge any surprise fees once the clients have invested funds with them. Having in mind this caveat, we advise traders 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?
Information is a pretty solid criteria for judging a brokers legitimacy. Scammers would not share much of their information, because precisely there inconsistencies and irregularities may appear which expose the whole set-up. A good example is this very broker and the misleading information it gave regarding its regulatory status.
After informing themselves for the brokers trading conditions – traders should be well-versed in the way of the scam:
Through clicking an ad with promises for fast money, you will be redirected to a website such as Bitcoin Evolution or Crypto Revolt where registration will require you to give your 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 peer 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!