Beware! Bitpairs is an offshore broker! Your investment may be at risk.
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At first glance, Bitpairs seems to be offering a completely legitimate cryptocurrency trading service. However, after a look through their website it becomes apparent that there is a critical lack of important information that leads us to believe that the service is not as it seems, and is most likely a scam. First off there is a claim that Bitpairs provides its customers with a Negative Balance Protection, but such a clause is not mentioned at all in the Terms of Service. In fact, the opposite holds true:
What this clause seems to imply is that the company has no responsibility to protect in any way your deposit. And since there is no claim that there is any regulatory body that insures it either, the Negative Balance Protection clause is probably not actually in place and is in reality just an empty promise on the side of the broker.
There is no option to open a demo account for free, mind you.
Bitpairs regulation and security of funds
Perhaps the biggest reason we hold our belief in Bitpairs’ illegitimacy is the complete lack of any address the company is registered under. This is troublesome because where it operates from determines what regulation it is subject to. For all we know it could be registered in a country like Samoa or any other obscure offshore destinations that simply does not have the legislature in place to require things like a minimal capital threshold the broker must clear, or to supervise them. Customers of offshore brokers are usually drawn in by the large leverages they offer, but such companies are often quite volatile and can easily declare bankruptcy in a couple of weeks since their founding. Licensing agencies have a fund that insures the deposits of traders if such a thing should happen. The insured amounts are quite reasonable too – up to 85 000 pounds of losses are covered by the Financial Conduct Agency. That is why traders are advised to stick to licensed brokers when investing their hard-earned money.
Of course, the names of the executives of the company are absent from the page as well. The only real way there is of contacting the broker seems to be trough two phone numbers, one with a UK area code and one with an Australian one. There are also two generic email addresses and what seems to be a contact form.
Bitpairs trading software
Bitpairs offers a web-based trading platform of their own. The standard in the trade industry is, of course, the two Metatrader platforms, MT4 and MT5. They offer the best user experience through graphical tools such as the ability to draw trend lines and easy use of an abundance of reference charts, as well as a robust community that makes use of and develops a plethora of automated trading bots. In comparison the platform the broker offers its customers can only be described as lacking.
There is a really basic line chart, but at least it can be viewed in a couple of time frames. There is no option to place pending orders or to use any more sophisticated trading options. The use of trading advisors or automated trading of any kind seems to be impossible in this platform. Even really usual functions like Stop Loss and Take Profit are not available.
Two things stand out as well – the leverage and the spread. The maximum leverage for cryptocurrency in the EU is set at 1:2. Bitpairs seems to offer one of 1:20. The spread is also abnormally wide at 140 dollars, which is almost 5 times more than the one that licensed brokers offer. Cryptocurrency is an incredibly volatile trading instrument and it usually fluctuates a lot. A legitimate broker would therefore limit the risks for themselves and their customers by not offering such wide leverages and spreads. We can also safely confirm our previous suspicion that Bitpairs is not licensed under US or EU regulations.
Bitpairs deposit/withdrawal methods and fees
There is also a minimum deposit limit of €250.
The deposit process seems fairly simple, the only means of depositing money to Bitpairs is credit card.
Once you deposit the minimum amount you can make one, but only for a week before it runs out. You are also entitled to a cashback of 0.25% of your monthly earnings, provided they reach a steep monthly volume of over €7,500. Safe to say it is unlikely that a trader will be able to accomplish that. There is also a requirement to have at least €100 in your account at all times to qualify for “benefits”. What they are is unclear. The danger that lies under such a phrasing is that some dishonest brokers will qualify the customer’s profits as “benefits”. This might very well be the case here too, considering that there is no mention of the word in this context anywhere on the page or in the Terms and Conditions.
Withdrawals have a peculiar minimum of €50. This makes little sense, surely someone is entitled to all the money they deposit? Additionally there is a clause that states the following:
This clause is problematic, because it does not clearly define what any of these terms mean. Of course one might take them to mean some kind of bonuses that the company gives out to exceptional traders, but “credits” can also mean the winnings of a trader or even their deposit. In fact a lot of fraudulent brokers get away with taking people’s money with exactly the same clauses. And how they do it is by setting another ridiculous minimum required volume of trades, in this case five hundred times the amount of the credits.
Furthermore, there is a clause that states “dormant” accounts are to be charged $50 every quarter of the year. This is close to the standard industry practice, if a bit high.
Lastly, the company claims to be processing withdrawal requests within 5 business days, which is completely unreasonable. The vast majority of trustworthy brokers do not take more than 24 hours to process such requests.
How does the scam work?
The cryptocurrency market is a relatively young one. It is also a complicated one – for example the Bitcoin mining process is something most people have heard of, but don’t have a clear understanding of. So a relatively big and profitable niche is opened to scammers of all kinds – they try to exploit this lack of understanding by running ads on popular social media platforms that claim to know how to manipulate the crypto markets or how to predict changes in it hours ahead of time. When someone stumbles on such an ad it eventually leads them to a site like Bitpairs’ where they are prompted to register using a phone number and email. Once they give them to the scammers they do no hesitate to exploit them in all sorts of ruthless ways so they can drain them of as much money as they can get away with. The scammers are patient, smart and sociable, so it is no wonder they can get people to hand over their money. Once the deposit is made the money is usually gone in a couple of hours and they demand more and more. Unlike legitimate brokers, they do not make money off the trades performed, but off the deposits themselves, so it is no surprise they care so little about running their customers’ accounts into the ground.
What to do when scammed?
Say you had this happen to you. What are the most important steps you can take to prevent further scams and get your money back? First off, file a chargeback on the deposit. You can do that for transactions that took place as early as 540 days ago. Secondly, change any credit cards you have give the details of to scammers or have used on their sites. Delete all software they had you install, including any desktop sharing apps like TeamViewer. Finally, do not trust any “recovery agencies” that might contact you. These are once again people trying to take advantage of you. They will promise to restore your deposited money, as long as you transfer a fee to them. The moment you do that they will disappear leaving you without the deposit or the fee.