Beware! VGXTrade 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.
VGXTrade is a forex brokerage supposedly based in Hong Kong. It provides the MetaTrader4 trading platform and a generous leverage. Traders are extended a leverage of up to 1:100. There is also an impressive selection of trading products available and a favorable spread of just 1 pip on EUR/USD.
VGXTrade regulation & safety of funds
On the brokers website we find no mention of an address or a country of origin which is quite disconcerting. Further reading through the terms and conditions of the broker we do not come upon a name which leads us to conclude that VGXTrade is anonymous. The only relevant piece of information we were able to find is that the company behind the brokerage is supposedly incorporated under the laws of Honk Kong. Here is a screenshot:
Readers are reminded that brokerages registered in Hong Kong have to be licensed by the Securities and Futures Commission (SFC) in order to operate legally in the territory of the country. After needlessly checking the registry of the SFC we can safely conclude that the brokerage is not among the list of licencees. Furthermore, we highlight that the website is completely anonymous which means that the people behind it are free to do as they wish without fear of any oversight or grievances from clients. All in all, 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.
VGXTrade trading software
Putting aside the regulatory uncertainty mentioned above, the brokerage does provide the MetaTrader4 terminal which is the foremost platform in online trading at the moment. Through a demo account we could test-drive the platform.
As was mentioned above – the selection of trading products available for clients is quite impressive and includes CFDs on precious metals, indices, as well as crypto currencies which we highly value as an advantage for potential clients of the broker. The industry average in Forex trading is a pip and a half which puts the spread offered by VGXTrade within what we would call favorable. The generous leverage offered by the brokerage isn’t uncommon for unregulated entities such as itself.
VGXTrade deposit/withdrawal methods and fees
As is often the case with anonymous brokerages – we found no information regarding the available payment methods for clients which is quite a big disadvantage for the broker. Usually in Forex trading potential clients of the brokerage may deposit or withdraw via VISA and MasterCard, Bank wire, as well as popular e-wallets such as Skrill. While going through the brokers terms and conditions we couldn’t find anything especially unsettling besides an “administrative fee” which is not specified. Here is a screenshot:
However, we can’t be sure whether the brokerage won’t charge any unexpected fees once the initial deposit is made. 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