Beware! CryptoRocket is an offshore broker! Your investment may be at risk.
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CryptoRocket is a forex brokerage registered in Saint Vincent and the Grenadines. It provides the MetaTrader4 trading platform and a generous leverage. Traders are extended a leverage of up to 1:500. Furthermore, there is a wide range of trading products from which to choose and a spread of 0.8 pips on EUR/USD which is significantly below the industry average. Furthermore, there is no required minimum deposit which means traders may initially deposit as low as $1.
CryptoRocket regulation & safety of funds
On the brokers website we read that the broker brand is owned and operated by a SVG-based company with the name CryptoRocket Limited. Saint Vincent and the Grenadines is a well-known offshore zone and a preferred location for shady brokerage.
Readers are reminded that the government of SVG has had to publicly state quite a few times in the past that it does not regulate Forex trading and thus we may safely conclude that not only is the brokerage not regulated. Furthermore, trading with an offshore, unregulated brokerage hides a lot of risk. There may be commingling which means that the brokerage may commingle together the finances of the firm and the finances of the clients.
Putting this aside, the brokerage provides the MetaTrader4 terminal which is the foremost platform in online trading at the moment. Through a demo account we could get a look at it. Here is a screenshot:
We could see a spread of just 0.2 pips which is quite low and very favorable, especially compared to the industry average of a pip and a half. However, we point out to readers that the brokerage charges a commission of $6 per lot which adds up to 0.8 pips, still very favorable. There is a leverage of 1:500 extended to traders. Such a high leverage always hides the risk of the trader losing more than his initial deposit so readers should always take notice. The required minimum deposit is perhaps the biggest advantage of the broker – CryptoRocket simply does not require one and traders may start trading with just a dollar.
Putting this aside, the lack of regulation and the offshore location of the brokerage incline us to suspect that potential client’s funds may be at risk.
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 FCA 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. With the FCA the compensation is up to 85 000 pounds, where as with CySEC it is up to 20 000 euro per person.
CryptoRocket deposit/withdrawal methods and fees
Potential clients of the brokerage may deposit or withdraw only via Bitcoin. The standard VISA and MasterCard, Bank wire, as well as popular e-wallets Skrill, Neteller are strangely and sadly missing.
In the terms and conditions of the brokerage we did not find troubling provision which are worth noting. As a matter of fact – the brokerage itself states that there are no withdrawal fees. Here is a screenshot:
However, not all brokerage are so open with their withdrawal conditions. 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?
Even though the forex trading world is extremely large and encompasses millions of people around the globe, the most common scamming is pretty simple and straightforward and as such – it’s not particularly daring to avoid. Here is a quick overview of how it is done:
Through clicking an ad with promises for fast money, you will be redirected to a website such as Bitcoin Evolution or The bitcoin miner where registration will require you to give your address, 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 angle here is pretty blunt – traders have a limited time period for filing achargeback with their bank and get their money back. The “recovery department” will simply want to mislead you into missing thе crucial period and, along the way, losing any chance you might have of getting the money back.
It is important here to take notice that both Visa and MasterCard are taking measures to combat unregulated forex brokerages by classifying all forex transactions as high risk. And they are correct in doing so. Furthermore, supporting their intention with clear actions – MasterCard has increased the previous time period of six months for filing a chargeback to a year and a half.
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.
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!u