Beware! FirstBit 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.
Trade in cryptocurrencies becomes more and more popular for the many advantages it brings to the traders – reaching every country, providing freedom for financial transactions free from government scrutiny, removing the cost of fees and charges associated with other payment methods, etc. Many forex brokers, including this one, provide trading options in cryptocurrencies. However, there is a difference, as some are legit and reliable, and some are not.
FirstBit Regulation and safety of funds
to verify how reliable this broker is, we check its registration. We find out that the website is operated by Mirror Media Ltd registered in the Dominican Republic. We searched the register of the Financial Services Unit to see if the name of Mirror Media Ltd appears in it. It does not! This means that FirstBit is non-legit and non-reliable to entrust your money to it and to engage in any trading activities.
Being an offshore zone for forex trade, the legislation in the Dominican Republic does not provide enough supervision and regulation upon forex brokers which means that should you choose to trade with a broker registered there, your funds will not be protected. We advise you to turn your attention to jurisdictions where a well known financial watchdog provides strict regulations for forex brokers, such as FCA in the UK, CySec in the EU and ASIC in Australia. You will find out that the conditions for forex trade are much better than those in the Dominican Republic and the guarantee for the protection of clients’ funds far outweighs any other conditions around the world. First of all, to get their license, forex brokers in the UK and the EU must have an initial capital of no less than 730,000 EUR and in Australia, 1 million AUD. Among other things, these high amounts for initial capital serve as a barrier against scammers as they will never invest so much money for the benefit of looking legit. There are also other measures to protect the clients’ funds from fraud and misuse as they are kept separately with tier-1 bank establishments. In addition to that, brokers must report their transactions on a daily basis for the purpose of providing transparency. There are other benefits for traders as well. Licensed brokers regulated by FCA in the UK must contribute to the local Financial Services Compensation Scheme from which their clients can be reimbursed in case of bankruptcy and they can get up to 85,000 GBP per person. In the EU, the amount up to which clients can be repaid is not that impressive, but nevertheless not negligible – 20,000 EUR per clients if the broker is regulated by CySec and contributes to the local Investor Compensation Fund.
In Australia, there are no existing compensation funds or schemes but by being well-capitalised Australian brokers regulated by ASIC can still protect their clients in case of unfavourable events.
We believe that we have provided you with enough information that will help you select a licensed broker that will serve your trading needs.
FirstBit Trading software
As we mentioned, FirstBit is a forex broker trading in cryptocurrencies. Although there is a button for the registration of a trading account, it does not work. However, the trading platform which is a web trader opens when you click on the Trading Floor, and you are good to go!
In the screenshot below, you can see what the web trader for FirstBit looks like. On the left, you have the menu for all the cryptocurrency pairs with their bid/ask price. In the middle of the screen is displayed the chart of a chose cryptocurrency pair with the fluctuation of its price in a given time frame. On the right, are the buttons for executing transactions. We selected to show you the chart of the BTC/USDT pair. The spread for this pair is $316 which is too wide but reflects the tendencies of USDT decline at the time of writing this review. Our main concern, however, are the parameters of the leverage which, as you can see from the image below, is 1:10. Such leverage is too high compared to the capped leverage of 1:2 for cryptocurrencies imposed for brokers in the EU and UK. And if you look at the account types information in the last screenshot, you will notice that it can reach 1:40! Such leverage is too high and presents serious risks for the safety of clients’ funds as it amplifies the potential of losing big time.
We do not advise our readers, especially the newbies and those with little experience, to trade with such high leverage.
If you are looking just for trading in cryptocurrencies and nothing else, probably a web trader is an adequate choice. However, if you want to have more trading options, we advise you to look up licensed brokers that offer more trading products and use as trading software MetaTrader 4 or MetaTrader 5 platforms. These two trading platforms offer a lot of advantages and they are choice number one among 80% of brokers thanks to the excellent package of trading tools and instruments that they offer, such as auto trading option, trading signals, an app market, VPS, code base with customs scripts, a financial calendar, etc. Their charting options and technical analysis indicators are to die for as they help traders predict the future direction of exchange rates and make a profit.
We strongly recommend you to find a licensed broker that offers either of these platforms for your enhanced trading experience.
FirstBit Deposit/Withdrawal methods and fees
FirstBit offers 5 trading accounts and the minimum initial deposit for the Basic account is $250. The Silver account starts at $10,000, Gold, at $25,000, the VIP starts at $100,000 and the Diamond – $500,000. The payment options are only via credit card and Bitcoin which does not provide traders with many choices.
The minimum withdrawal amount via credit card is $10 and for wire transfers is $30. The broker charges different types of withdrawal fees depending on the withdrawal amount and the withdrawal method, so we advise you to read carefully the Terms and Conditions should you consider trading with this broker. For example, withdrawals made via credit card are free of withdrawal fees. If the withdrawal amount is less than $1,000, no fees will be charged for the other withdrawal methods. But, if the withdrawal amount is between $1,000 and $4,999, then a fee of $50 will be applied, etc.
You may have noticed from the image with account types information that this broker offers different bonuses depending on the deposit amount. Some of you may think that bonuses are free gifts that will add extra trading power, but that is not accurate. Bonuses are funds belonging to the broker and they come with some conditions attached to them that may not be so easy to achieve. In this case, if the client has accepted a bonus and has not achieved a trading volume that is equal to the required leverage amount divided by 4 but wishes to make a withdrawal, then a withdrawal fee equal to 20% of the withdrawal amount will be applied. Furthermore, the bonus and any profit made will be deducted from his/her funds. Also, if the trader is not able to execute the required turnover within 3 months of accepting the bonus, the bonus will be cancelled and removed from the client’s account.
We absolutely do not advise potential traders to accept bonuses and wish to inform them that licensed brokers do not offer bonuses.
How does scam work?
Scam works in different ways. It could be either that you receive an unsolicited telephone call or you see one of these flashy ads on the Internet or the social media promising you a quick and easy profit. Scammers will promise you the sky and the earth until you give way to temptation and deposit money. Once you give them money you get caught in the scammers’ mousetrap and the cheese in the shape of a big fat money fall is gone! It may take some time before you realise that you are being scammed. Scammers are smooth talkers and they are masters of deception. They will give you some excuses as to why the big profit hasn’t come yet and will try to lure you to make even a bigger investment because according to them, the more you invest, the more you profit. After you have been waiting for a while and you finally come to your senses, you realise that you are being scammed. All you want now is to get your money back and get out of there. However, the scammers won’t make it easy for you! They will try to delay you so that you miss the deadline for applying for a chargeback.
What to do if scammed?
There are a few things that you must do immediately – file for a chargeback if you have paid using a VISA or MasterCard. Those two payment providers allow you 540 days time frame within which you may file for a chargeback.
However, the chances are grim if you have used bank transfer or Bitcoin as a payment method. There is no chance you’ll be able to recover your money.
In such a desperate situation, some so-called ‘recovery agents’ may approach you with offers to recover your money for a fee. Be cautious as you may be dealing with another type of scammers. Always check the information about the recovery agency – make sure it is legitimate and transparent in the public eye. Also, some scammers publish personal comments after our review about how they have been scammed and how they found a recovery agent who helped them get their money back. Do not trust such comments and do not use the published contact info in them as it will lead you to another scammer!
And lastly, a reminder to cancel your credit card if you have given your CVV code to the scammers and erase any software from you PC that gives the scammer access to your personal data.