Beware! 69Brokers is an offshore broker! Your investment may be at risk.
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69Brokers is a Forex brokerage supposedly based in Switzerland. It provides clients with the MT4 trading terminal. Furthermore, there is wide range of trading products from which to choose and a spread of just 0.2 pips which is quite low and leads us to question whether it corresponds to the real-time spread. The required minimum deposit is $500 which is twice the industry average and quite excessive.
69Brokers regulation & safety of funds
We receive no corporate information from the website except two different addresses – one in Switzerland and the other (a contact address) in the UK. Such chaotic information is a clear warning sign in Forex trading. Furthermore, anonymity means we have no clue who the people are behind the website and we have no way to contact them directly.
Switzerland is deeply integrated within the EU without being a member-state through a series of bilateral treaties. Online Forex trading has been taken into consideration in the country’s legislation and the Swiss Financial Market Supervisory Authority FINMA is in charge of overseeing financial activities. Forex brokerages in Switzerland have to be licensed by the FINMA but we find no mention of such a license on the broker’s website. However, after checking the online registry of the Swiss authorities we can safely conclude that 69Markets does not fall under any regulatory oversight whatsoever.
As was stated above, the brokerage provides the MetaTrader 4 platform which is the widely preferred choice of traders at the moment. We were unable to register for a demo account due to a technical error in the registration. Here is a screenshot:
Nonetheless, we were able to download the MetaTrader 4 and we could see it is provided by another company – Trading Technologies which, again, speaks against the brokerage and undermines its legitimacy. Here is a screenshot:
We could see a spread of just 0.2 pips which is exceptionally low, especially compared to the industry average of a pip and a half. However, we are not convinced that the spread corresponds to real-money accounts. Furthermore, the brokerage does not specify the leverage extended to traders.
Traders needn’t have to worry themselves with such risk if they choose to trade with a brokerage regulated and authorized by a prestigious regulatory agency. Such agencies are the Financial Conduct Authority in the UK or CySEC in Cyprus which have been leading names in Forex trading for some time now. Their regulatory framework is composed of a number of strict rules which prevent clients from falling victims to fraud. Such rules include the segregation of accounts which assures that commingling with the client’s money is not possible. Furthermore, a license by such a regulatory body entails participation in a financial mechanism by which clients may be compensated if they suffer losses due to fraud or bankruptcy. The FCA compensates traders up to 85 000 pounds where as CySEC guarantees up to 20 000 euro per person.
69Brokers deposit/withdrawal methods and fees
As is often the case with unregulated and anonymous brokerages – we could not find any information on the website regarding the available payment methods. We could not find in the Terms and Conditions any nasty withdrawal conditions either. However, the brokerage does state in the terms and business that clients are liable to any transfer fees or commissions that may be warranted.
Such ambiguous provisions induce us to remind readers that there is no guarantee that the brokerage may not charge some unexpected withdrawal fee once it has received the initial deposit. This is why we 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?
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!