Beware! Coinstec is an offshore broker! Your investment may be at risk.
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Is Coinstec scam or legit forex broker? Read the complete review before opening an account with coinstec.com
Coinstec is a unregulated broker based in Estonia, which offers crypto CFDs on a web based trading platform.
The broker says to be offering MetaTrader4 platform, but when we tried to download it, it turned out the MT4 is unavailable. So we had to open a demo account with their web based trading platform.
As we noted Coinstec is focused exquisitely on the crypto market and the only CFDs on their trading platform were crypto coins including Bitcoin, Bitcoin Cash, Lisk, Qtum, Stellar, Nem, Cardano, Verge, Monero, Botcoin Gold, Ripple, Litecoin, Dash, Ethereum and Ethereum Classic.
The BTCUSD spread was 50 USD, which is about twice higher than the spread traders would usually expect with a standard account. And yet our main concern with Coinstec is the fact that the broker does not have a legit license.
Coinstec regulation & safety of funds
As we noted Coinstec is yet another, low credibility, unregulated broker, while the company behind it is the Estonia based Coinstec OU.
As usually in such cases our advice is to deal only with brokers, regulated by respectable institutions like the Financial Conduct Authority (FCA) in the UK, the Cyprus Securities and Exchange Commission (CySEC) or the Australian Securities and Investments Commission (ASIC).
Properly regulated brokers are strictly supervised and are subject to rigorous control. On top of that if you are trading with a FCA regulated broker your funds will be insured up to 50 000 GBP, while with all other EU regulated brokers, like for example by the CySEC, your insurance will cover at least 20 000 EUR.
Coinstec deposit/withdrawal methods and fees
Be aware of the trading bonuses that Coinstec might offer you, because they are subject to some special withdraw conditions. For example, if you accept 100 USD as a trading bonus, you will have to trade at least 20 standard lots or 2 million USD before you will be allowed to withdraw. Also, be aware that Coinstec will charge you an additional 30 USD withdraw fee on a transaction, if you request more then one withdraw per month.
Coinstec does not tell us what is their minimum deposit requirement. Just have in mind that most brokers require a minimum investment of about 250 USD.
The payment methods accepted include major credit cards like VISA and MasterCard, as well as bank wire transfers.
How does the scam work?
You may not have heard of the so called robo scam websites like CryptoContractsApp or Crypto Revolt, but that is where most people get scammed in the past year or so. There if, you happen to come across one of those sites, you will be offered a “once of a life time opportunity” to get instantly rich by investing with some state-of -the-art trading platform or an app. And if you get hooked, all you will be asked for in the beginning will be your e-mail and phone.
Than after you fill the registration form you will be automatically transferred to the web page of a unregulated scam broker, where you will be invited to deposit about 250 USD and start trading right away.
And take a note that your first trades will be surprisingly successful and basically the balance of your account will more than double in just a few days. That, however is part of the scam, and your account will simply be manipulated, because scammers just want to make sure you will invest a more substantial sum.
And by the same time you will surely get a phone call as well. It will be “your senior account manager”, who will professionally explain you, that if you really want to make some big money, you will definitely have to invest at least 10 000 USD.
And besides, most people does not realize they have been scammed until the very moment they request to withdraw some of their funds. Then it suddenly turns out this is not possible, because of some minimum trade volume requirement linked to the welcoming bonus, they have accepted. The pretext for the cancellation of the withdraw request might be whatever, but in the end it will all come to the same – all withdraw requests will be canceled.
What to do if scammed?
Do not waste a second but immediately file for a charge back with your credit card provider. The good news here is that both VISA and MasterCard extended the maximum period, in which you will be able to do that to 540 days.
And if scammers have managed to get to your personal banking details in some way, be sure to immediately cancel your credit card and change your online banking password.
Finally, do not trust the so called recovery agencies. It will be just waste of money and time, as they will not recover you a single dollar, but will simply require you to pay them some cash in advance and basically that is how the story will end.