500.trade review – 5 things you should know about 500.trade

Beware! 500.trade is an offshore broker! Your investment may be at risk.

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Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.

500.trade is a website that claims to be offering a world-class trading experience with state of the art technology and strict security yet fails to deliver on every one of these fronts. From its bare-bones trading platform to its questionable terms and services we believe it is the exact opposite of what it states.

500.trade regulation and safety of funds

When using a broker it is important to know exactly who you’re going to be depositing your money with and under what jurisdiction they are registered. One thing that stood out to us was the lack of any real contact information. All we had to go on was an email, a phone number with a Luxembourg area code, and a P.O. box. This would imply that the broker operates there, however we suspect it is registered in a completely different country – the offshore haven of St Vincent and the Grenadines. We believe that to be the case because of this clause in the Terms and Conditions:

So why would they want to convince you that they are registered in the European country? Well, Luxembourg brokers are under the regulation of the Commission de Surveillance du Secteur Financier (CSSF). As such there are strict rules in place for Forex trading that ensure the brokers are legitimate. One such rule is the minimum starting capital requirement of 730 000 euro for a broker. There is also a strict limit on the leverage that can be offered and the broker undergoes vigilant supervision at all times. The CSSF also imposes safeguards for the trades, for example requiring the brokers participate in a fund that compensates their customers in the event of broker bankruptcy and keeping clients’ funds in segregated accounts. This is not the case for offshore brokers in locations like St. Vincent. Because such safeguards are not present there it is advisable to stick to regulated forex brokers.

500.trade trading software

500.trade offers their own web-based trading platform and Metatrader 4. MT4, along with MT5 are the two flagship platforms in the industry with their user-friendly interface. Curiously enough, MT4 is only available to what seems like the highest account tier. It is also unclear how one can upgrade their account to that tier. Therefore we have to conclude that the company does not actually provide the software to its clients.

The web-based platform is more basic than MT4 and considerably more difficult to use. Although it features most of the graphical tools like trend lines and Fibonacci graphs it is is also much more difficult to use because of the dark and dull colors.

The instruments one can use to trade are quite limited too. It seems a trader can sell or buy commodities like gold or crude oil and indices. The gold spread of $2,5 is quite wide. For reference, reputable brokers only offer a spread of about $1 for the commodity. It is unclear what the leverage the broker offers is.

There is also a Social trading tab which is strangely barren.

500.trade withdrawal/deposit methods and fees

The minimum deposit amount is 250 USD, GBP or EUR. Deposits can be made using a credit card, wire transfer or bitcoin. Depositing using bitcoin is not advisable, because it offers no chargeback options.

Withdrawals are subject to a rather suspicious clause that requires a minimum withdrawal amount of 100 USD, GBP or EUR. This is unacceptable, no company should be able to dictate that a customer cannot make use of their own money because it is under such an arbitrary amount.

Furthermore, there is a delay of up to 7-10 business days on any withdrawals, which is again, unacceptable. The vast majority of legitimate brokers are able to process such requests within 24 hours of them being submitted.

There is a mention of a margin requirement as well. Scrolling down we discover the relevant clause which states:

What this means is that to withdraw any money from your account you must fulfill the frankly absurd volume of 25 times the bonus and the deposit. There does not seem to be a way to forfeit your bonus, and in fact 500.trade doubles down in the next provision of the Terms:

This might seem like a weird requirement but it’s actually quite common with scam brokers. They place stipulations like this to make sure their victims are not going to be able to claim their money back in any way permitted by the ToS. In fact, even if you are able to miraculously reach the steep requirements your claim might be straight up rejected by the company for not providing the “correct” documents. Very often this is the case and people who choose to invest their money in such brokers rarely see any of it.

Another off-putting detail in the Terms of Service is the “Dormant trading” clause.

Now, most reputable brokers actually charge fees on inactive accounts, but they are usually well defined. Here we have the complete opposite. In the very first sentence there is a vague requirement of performing a trading requirement above a “very low volume” for an equally vaguely defined time frame he is subject to a commission which is completely up to the judgment of the company. This is a really arbitrary and unusual clause that seemingly leaves the trader completely at the whims of the broker for no good reason.

How does the scam work?

Unfortunately it would seem that 500.trade is just another fraudulent broker. Companies like that use a rather clever and simple, if completely amoral, strategy to make their profits. First off they run ads on popular social media platform that promise a quick buck, or videos that tell a rags to riches story. These ads lead to websites that promise their visitors the world, if not sometimes more. If that visitor is fooled into giving their phone number and email information the scammers go to the next stage of their plan. They start aggressively pushing the victim to be to invest, to just sit back and watch their money multiply thousands of times. The means of pushing them are nonstop emails and phone calls from “account managers” or “financial advisors”. These figures are quite patient and persistent. When the trader decides to go with their advice and deposit some money their account is usually run into the ground. In fact such accounts never make any profits. This is to get the victim of the scam to deposit more and more money until they realize they have been had.

What to do when scammed?

When scammed your options are quite limited. The most crucial detail is that you are still vulnerable to further scams. If you receive a call from a “recovery agency” do not trust what they say – they are not who they claim to be, but the final stage of the scam. These “agencies” will promise to restore your losses, at the cost of an advance fee. If you accept and send them the fee you will never see it, or the lost money ever again.

Apart from that there is some recourse. You can file a chargeback on the transaction up to 540 days after it if you have made it using a credit card. As stated above, however, if you have used bitcoin to deposit money with 500.trade there is no policy you can follow and the money is, unfortunately, probably lost.