Beware! VIX500 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.
VIX500 is a unregulated, offshore broker, that recently was blacklisted by the Commissione Nazionale per le Società e la Borsa (CONSOB) in Italy for targeting Italian and EU customers without proper authorization.
Otherwise the broker offers three account types with a leverage of up to 800:1 and a choice of some 50 currency pairs and CFDs on stocks, gold, commodities, indices and oil.
VIX500 regulation & safety of funds
VIX500 is owned by Blue Seal Limited, which is registered in Vanuatu, but all payments are processed by Blonde Bear OU, which is based in Estonia. And as we noted, there is a fresh warning by CONSOB in Italy against the broker and the companies behind it.
Have in mind that trading with unregulated offshore, brokers is more or less a recipe for getting scammed.
Trading with a broker, licensed by an official regulator such as the Financial Conduct Authority (FCA) in the UK, the Cyprus Securities and Exchange Commission (CySEC) or the Australian Securities and Investments Commission (ASIC) on the other hand is completely safe.
Properly licensed broker are subject to strict oversight. On top of that your funds with a broker regulated in the European Union, will even be insured for at least 20 000 EUR, while with FCA brokers the insurance goes up to 50 000 GBP.
VIX500 deposit/withdrawal methods and fees
Going through VIX500 terms and conditions we came across several pretty worrisome clauses. First of all VIX500 offers “Algo trading accounts“, which are basically managed accounts and if that is not bad enough, clients who choose to open such an account will not be allowed to request a withdraw for 6 months.
Have in mind that because most brokers act as market makers, legit brokers never offer managed accounts. (A market maker makes profit when traders lose their money and if the broker is managing your account they it will have the incentive to “mismanage” it.)
Second, VIX500 offers trading bonuses of between 40% and 100% of your deposit, depending on the account type, and that is another highly controversial practice. The problem with the trading bonuses is that they are always linked to some minimum trade volume requirement – in the case of VIX500 you will have to trade at least 1 000 000 USD for every 30 USD bonus you have received, before you will be allowed to withdraw.
And finally VIX500 reserves the right to impose withdrawal limits and withdrawal fees in its system and will not allow you to request a withdraw for less than 200 USD.
Otherwise the minimum deposit requirement with VIX500 is 250 USD and payments can be made via bank wire transfers, credit cards like VISA, MasterCard and Union Pay, as well as Western Union – a money transfer service.
How does the scam work?
A scam scenario always begins with some unrealistic offer for fast and easy money in exchange of a small investment, probably with some innovative trading algorithm or platform. You may even watch a video ad on one of the so called robo scam web sites like CryptoContractsApp or Crypto Revolt, where if you get hooked and register, filling the simple registration form, you will be automatically transferred the web page of a unregulated scam broker.
The initial deposit that scammers will ask you for will not be huge – usually about 250 USD. And your initial trades will be surprisingly successful – actually your 2500 USD will swell to almost 500 USD in just a few days. That however will be just part of the scam, as scammers simply want to make sure you will deposit a larger sum. And precisely that is what your “senior account manager” will try to convince you to do. You will receive daily calls and e-mails, with trading signals and advises. Basically however, the message will be that you should invest more – like at least 10 000 USD.
And most people never realize they have been scammed until the very moment they decide to withdraw some portion of their funds. Than all of a sudden it turns out they are not allowed to withdraw, because of some minimum trade volume requirement, possibly linked to the welcoming bonus, you have so gladly accepted, when you opened your account in the first place. Certainly the excuse might be different, but in the end it will all come to the same – you will not see a single penny back.
What to do if scammed?
The only way to get your deposit back is to file for a charge back with your credit card provider. Fortunately both VISA and MasterCard recently adopted a new anti- scam policy, according which customers, who have been scammed online will be able to file for a charge back within 540 days.
And if for any reason you have told scammers your personal banking details like your credit card number or online banking password, be sure to immediately change the password and block your credit card.
And finally, do not accept the offers of the so called recovery agencies. They will not recover you a single penny, but will simply ask you for some cash in advance and basically that will be the end of the story.