Beware! FxCryptoClub is an offshore broker! Your investment may be at risk.
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
FxCryptoClub is a Forex brokerage registered in the Marshall Islands. The required minimum deposit is double the standard of $250 which is quite high but there is supposedly a wide range of trading options. Furthermore, the leverage extended to traders is quite generous at 1:400 but the spread of 3 pips on EUR/USD is just about what we would consider favorable.
FXCryptoCLUB regulation & safety of funds
Through the website of the brokerage we discover that the company behind it is governed by the laws of the Marshall Islands and is registered under the name CapCorp Ltd.We remind readers that the Marshall Islands are an offshore zone that is not subject to any sort of regulatory oversight. And no wonder since the Marshall Islands has become a top-destination for would-be scammers due to its very liberal laws regarding the registering of companies. The government does not even require for someone to be physically there in order to register a company. Such a loophole has surely been noticed by many ill-minded brokers and utilized. Nonetheless, it’s safe to assume that FXCryptoClub, irrespective of its legitimacy, does not fall under any regulatory oversight whatsoever because the government of the Marshall Islands does not include Forex trading within its regulatory framework. On top of this while researching the broker on the web we came upon an official warning issued by the Austrian Financial Markets Authority which reads that the brokerage is suspected in being involved in scam operations. This puts tremendous risk on any transactions with FXCryptoClub.
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. The FCA provides up to 85 000 pounds per person, while CySEC guarantees up to 20 000 euros.
FXCryptoClub trading software
The brokerage does not provide the MetaTrader4 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, the Activ8 tradin terminal is available and we were further able to register for a demo account and could see a spread of 3 pips on EUR/USD which is twice the industry average and quite excessive in our view. We tend to consider any spread above the pip and a half mark as needlessly high.
FXCryptoCLub deposit/withdrawal methods and fees
Going through the terms and conditions of the brokerage, we did find quite a few troubling provisions. There is a dormant account fee of 10 percent each month, as well as a withdrawal fee, minimum withdrawal amount and a turnover requirement. 50.00 USD/GBP/EURO for wire transfers; 25.00 USD/GBP/EURO for credit cards plus a processing fee of 10.00 USD/7.00 EUR/5.00 GBP; 25.00 USD/GBP/EURO for ePayments. A levy of 10% of the withdrawal amount will be charged to any withdrawal from an account that has not executed more than 200 in turnover and/or from accounts that have not been verified. Furthermore, we learn that FXCryptoClub offers a bonus promotions which, however, is always tied with an excessive trading turnover requirement and we appeal to readers no to fall in such easy traps.
Trading with an unregulated brokerage is quite risky and this is why we always advise traders to 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?
Unfortunately, the possibility of a scam looms over almost every trade in Forex, especially if you are dealing with an unregulated brokerage. That is why we believe traders should be acquainted with the methods of a scam. Here is how it would typically go about:
Through clicking an ad with promises for fast money, you will be redirected to a website such as Bitcoin Evolution or Crypto Cash 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 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.
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!