Beware! CryptoClubFX is an offshore broker! Your investment may be at risk.
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CryptoClubFX is a Forex brokerage registered offshore in Saint Vincent and the Grenadines. It provides the MT4 trading terminal and clients are extended an extremely generous leverage of up to 1:200. Furthermore, there is wide range of trading products from which to choose and a spread of 1.6 pips which is a bit above the industry average and above what we would call favorable for traders.
CryptoClubFX regulation & safety of funds
According to the website the company behind the brokerage is registered in Saint Vincent and the Grenadines by the name Game Capital Ads Limited. This means the brokerage is registered offshore and not subject to any regulatory oversight because the government of SVG has multiple times publicly stated it does not oversee online Forex trading. There are countless SVG Forex brokerages that give the same address and have similar trading conditions, all of them are without proper regulation and CryptoClubFX does not seem to differ from the rest. We can safely conclude that CryptoClubFX does not fall under any regulatory oversight whatsoever.
Furthermore, while researching the brokerage we came upon an official warning issued against it. CryptoClubFX has been blacklisted by the financial watchdog in Italy.Such irregularities and clear-cut signs of trouble are the usual “tell” of a scammer. With no regulatory oversight we can’t be certain about the company behind the operation and whether it will fulfill its obligation towards clients. However, in order to be impartial we must say that the brokerage does in fact provide the MetaTrader 4 platform which is the foremost trading terminal at the moment. There is also a test-drive available and we could see a spread of 1.6 pips with a leverage of 1:200.
Regardless of this, being blacklisted in Forex trading is a major warning sign and we must state 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.
CryptoClubFX deposit/withdrawal methods and fees
Potential clients of the brokerage may deposit or withdraw only via the standard Visa and MasterCard, as well as bank wire, Neteller and AstroPay. he brokerage openly states on its website that it does not charge any withdrawal fees, however, we should highlight that many scammers choose not to disclose such information to would-be clients. Without proper information on the website we cannot be certain whether clients won’t be charged with any unexpected withdrawal or deposit fees once they invest.
Having in mind all that was stated above, 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!