Beware! Monfex 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.
Monfex is an offshore Forex brokerage registered in St. Vincent and the Grenadines. It provides a web-based trading platform, not the MT4 trading platform, and presumably offers a wide range of trading options. Traders are also extended a leverage of 1:50 and the required minimum deposit is 0,01 BTC which is about $100 and quite favorable compared to the industry average of $250.
Monfex regulation & safety of funds
On the brokers website we read that the broker brand is owned and by a SVG-based company with the name TENB Limited. Saint Vincent and the Grenadines is a well-known offshore zone and a preferred location for shady brokerage.
We remind readers that the government of SVG has multiple times publicly stated that it does not oversee Forex trading and thus we may safely conclude that the brokerage is 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. However, putting all this aside – the brokerage does provide a web-based trading platform. Through the website we get the impression that the unregulated brokerage attempts to pass of as a crypto exchange; it accepts deposits in Bitcoin, as well as even writing the minimum required deposit in Bitcoin. However, the brokerage is actually providing clients only with CFDs on crypto currencies. Through a demo account we got a look at the platform. Here is a screenshot:
As you can see – the platform is quite disappointing as it lack s the main features which are otherwise present in the MetaTrader 4 platform. We always consider the lack of the MetaTrader 4 platform as an disadvantage because it’s the best choice and the preferred choice of more than 80 percent of the traders. The platform provides advanced charting package, lots of technical indicators, extensive back-testing environment and a variety of Expert Advisors (EAs). Beginner traders will find the trading platform easy to use as well, due to its user-friendly layout. Through this web-based trading platform, however, we do see quite an attractive spread on BTC/USD. It is only $2.5 which is extremely low, even if we have in mind the 0.11 percent commission will charge. The leverage extended to traders is quite high at 1:50, usually crypto brokers offer lower than that. Readers should have in mind that European Securities and Markets Authority (ESMA) has set the leverage cap for forex transactions at 1:30 and with crypto coins just 1:2, however, being an offshore brokerage Monfex doesn’t have to worry itself with such rules.
All in all – the lack of regulation inclines us to suspect that potential traders of the brokerage may be exposed to substantial 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.
Monfex deposit/withdrawal methods and fees
Potential clients of the brokerage may deposit or withdraw via credit cards and wire transfer, as well as Bitcoin, Ethereum and Tether
Last but no least – the bonus conditions. Here is a screenshot:
There is a requirement for a minimum trading volume in order to withdraw from an account that has taken advantage of the bonus promotion. We urge readers to take notice that almost always a bonus promotion, especially with unregulated brokerages, is tied with extreme trading requirement conditions which make it almost impossible to withdraw your money.
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. This is why 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?
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 DaxRobot or CryptoContracts 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 a chargeback 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!
