Beware! CryptoFXOption is an offshore broker! Your investment may be at risk.
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CryptoFXoption is a CFD brokerage supposedly based in Bulgaria. It provides a web-based trading platform, not the the MetaTrader 4 platform. The required minimum deposit is the standard $250 but further trading conditions remain undisclosed.
CryptoFXOption regulation & safety of funds
The corporate information of the brokerage is quite chaotic and unclear. We could not find a company name on the webpage, however, we did stumble upon a UK address. Furthermore, while reading through the terms and conditions of the brokerage we discern that the website is actually owned by the company Orion Services EOOD and governed by the laws of Balkan country Bulgaria. We remind readers that Bulgaria is a member-state of the European Union and online Forex trading is duly integrated within its regulatory framework which is modeled after the ESMA guidelines.
However, we find no mention of a license by the UK or Bulgarian authorities – thus we may safely conclude that the brokerage CryptoFXOption does not fall under any regulatory oversight whatsoever. For the sake of diligence we ran a quick search on the online registry and can confirm that the brokerage is not licensed. This leads us to conclude that trading with it may be tied with a substantial amount of 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.
CryptoFXOption trading software
The brokerage does not provide the MetaTrader 4 trading platform which we always consider a huge disadvantage since it is the foremost trading terminal at the moment equipped with features such as almost a 100 market indicators, as well as customizable trading robots. It is also the preferred choice for more than 80 percent of the traders in Forex. Instead, CryptoFXOption presumably supports a web-based platform, however, there is no demo account available which we consider a huge blow for the legitimacy of the brokerage since a test-drive is the most transparent way of getting a hold of the trading conditions of the broker. Furthermore, there is no information presented on the website regarding the trading conditions which leaves us pretty much in the dark regarding the offer of the brokerage.
CryptoFXOption deposit/withdrawal methods and fees
Clients may deposit or withdraw via the standard Visa and MasterCard, as well as bank-wire. Going through the terms and conditions of the brokerage we did come upon provisions which are worth noting.
There is a withdrawal fee of 3.5 percent which is quite excessive and definitely raises the cost of trading with the brokerage. Furthermore, there is a clearance fee of 5 percent, as well as an unspecified monthly dormant account fee. We consider such an amalgam of fees to be a characteristic of shady brokerages whose goal is to siphon the client’s funds once they have been deposited.
There are also withdrawal conditions pertaining to accounts that have taken advantage of the bonus promotion which are extremely vague and unclear but there are always purposefully excessive in order to impede any trader from actually receiving his money. We warn readers no to fall in the trap and not to take advantage of a bonus promotion.
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 Bitcoin Evolution or Cashless PayGroup 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!