Beware! Phemex 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.
Phemex Regulation and safety of funds
From the information available on its website, we understand that Phemex is a platform operated by Phemex Limited. We also found out a certificate issued by the Financial Crimes Enforcement Network with the Department of the Treasury in the USA which the company claims as its registration. However, even on the certificate, you can read that “the inclusion of a business on the MSB Registrant Search Web page is not a recommendation, certification of legitimacy, or endorsement of the business by any government agency“.
Furthermore, in the legal documents, we found out that the Terms of Agreement are governed in accordance with the law in the British Virgin Islands which is an offshore zone for forex trade and as such there are no guarantees for the safety of clients’ money.
Lastly, the Financial Conduct Authority (FCA) that is the official regulator for forex brokers in the UK has issued a warning that the company is not authorised to provide financial and investment services there (image below).
Based on these facts, we consider Phemex to be a fraudulent broker and do not advise you to trade with it.
There is a long list of legitimate and reliable UK brokers that are strictly regulated by FCA and provide many measures for the safety of your funds should you decide to join them. For example, to be licensed in the UK, forex brokers must invest no less than 730,000 EUR in the form of initial capital which besides the obvious serves to prevent scammers from sneaking in as they will never invest so much money for the benefit of looking legit. Other measures to guarantee the safety of clients’ funds include negative balance protection, keeping clients’ funds segregated from broker’s, regular audit and reporting of transactions for the sake of transparency, etc. A big advantage for joining a UK broker will be the fact that they are obliged to participate and deduct funds towards the local Financial Services Compensation Scheme which provides up to 85,000 GBP per client in case the broker goes bankrupt.
Also, please note that EU regulated brokers must meet similar requirements in terms of clients’ funds’ protection. The big difference between them and their UK counterparts comes from the fact that EU brokers participate and deduct funds towards a local investor compensation fund which repays up to 20,000 EUR per client if the broker becomes insolvent.
Phemex Trading software
Phemex offers spot and contract trading and the trading software is a web trader which is a browser-based platform with very basic functionality and a third party chart developed by TradingView (image below). The spot trading is done in cryptocurrency pairs and the contract trading is done in crypto/USD currency pairs. The order book that this platform offers contains a list of orders and records the interest of buyers and sellers in the particular exchange which is valuable trading information and helps the traders to decide which order they can execute.
If you are a newbie in forex trade, we advise you to turn to a more conventional way of trading with a legit broker that offers good quality software, such as the MetaTrader 4 or MetaTrader 5 trading platforms. They give you the option to diversify your trading and the excellent package of trading tools and instruments they offer will enhance your trading experience. Both platforms are equipped with an auto trading option, an app market, VPS, a financial calendar, code base with customs scripts, trading signals which can be obtained for a subscription fee, etc. A key feature for MT 4 and MT5 is the charting options which provide a variety of charts, time frames, colours and the option of creating customised templates. The array of technical analysis indicators, such as Bollinger Bands, Fibonacci retracement, moving averages, etc., will allow you to predict the future direction of exchange rates and make a profit. It is not by chance that these platforms are preferred by 80% of the forex brokers.
Phemex Deposit/Withdrawal methods and fees
The trading accounts available to the clients are BTC and USD accounts. The minimum initial deposit for the BTC account as per the image below is 0.00000001 BTC, the equivalent of 0.00051 USD as per the current rates which frankly speaking does not make any sense. For the USD account, the minimum initial deposit is 0.002 BTC which is roughly 100 USD. The image below also shows that there are no withdrawal fees.
We want to point out that similarly to other dodgy brokers, this one too offers bonuses. There are two types of bonuses – Deposit bonus of $60 and Trading bonus of $10. To be eligible for the Deposit bonus, the client must deposit no less than 0.2 BTC or 2,000 USDT, or 10 XRP, etc., and also reach a specific cumulative amount of contract transactions that are no less than $50,000. In our opinion, this is not something easily achievable. However, this bonus cannot be withdrawn and if the trader attempts to do so, the remaining bonus amount will be removed from his/her account.
How does scam work?
A lot of people get scammed in different scammers’ schemes not because they are naive but because scammers are masters of persuasion and manipulation. It all starts with unsolicited telephone calls or a flashy ad on the Internet or social media. Sometimes people give up to temptation and invest money in shady schemes made to look legit and attractive and always promising quick and easy money fall. Once you deposit money into any of these schemes, you reach a point of no return! Your money is gone down the scammers’ food chain and you’ll have a lot of trouble recovering it. Scammers will do anything in their power to delay you, so you miss the opportunity to file for a chargeback. They will ask you for this and that document and will find hundreds of reasons not to let you retrieve your money. The trick with offering bonuses in forex trading is one of those as your funds are mixed with the bonus money and it takes a lot of hassle to fulfil the broker’s requirements before you are able to withdraw any funds.
What to do if scammed?
Speed does it! You need to act very quickly if you want to recover your money. Immediately apply for a chargeback if you have made your deposit via credit card. Fortunately, VISA and MasterCard give you 540 days within which to apply for a chargeback.
If you have paid via wire transfer or Bitcoin, chances of retrieving your fund are grim. Anyway, we want to warn you that some of the so-called recovery agents may approach you and offer to retrieve your funds. For a fee, of course! Be cautious when dealing with them as it may be another form of scam! Always check if the recovery agency is legitimate and visible to the public!
Another thing we advise you to do is to immediately cancel any credit cards if the scammers have your CVV code. Also, make sure to erase any programs on your computer that give scammers access to your personal data on your PC.