Beware! ZotaTrade 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.
In this article, we are going to review ZotaTrade, an offshore Forex broker that’s somewhat regulated. They offer standard Forex and CFD trading provided on various platforms, including MetaTrader5. However, some aspects of their business put them behind the rest of the legitimate brokers we can recommend to the traders. Find out the reasons for our concerns in the full ZotaTrade review.
ZotaTrade REGULATION AND SAFETY OF FUNDS
ZotaTrade is an offshore broker and a trading name of Zota Capital LTD, an offshore IBC registered in the Marshall Islands. As a company based there, they do not follow any financial rules or regulations, so it’s a broker that’s risky for traders and investors. Offshore entities like this one may carry out illicit or fraudulent activities without suffering the consequences of their criminal actions. That’s why the Marshall Islands are a favourite spot for scammers and other dodgy businesses setting up scam schemes to rip traders off their money.
On the other hand, ZotaTrade is a company registered by the Financial Commission (FinaCom). That’s a Hong Kong self-regulatory body operating independently from the government. It’s an NGO protecting customers’ interests, providing dispute resolution services and also operating a Compensation Fund, which covers clients of up to 20 000 EUR per dispute. Nevertheless, it’s much less powerful than the national financial regulators in Europe, Australia and North America, so the protections they can offer are limited. Your funds are not safe if you deposit with ZotaTrade because it’s not a fully regulated FX company, notwithstanding the FinaCom license that they have.
Avoid them and see the adequately regulated EU brokers and the British brokers we recommend by following the links provided. The European financial markets are strictly regulated and safe for traders and investors. Financial authorities in the EU and UK enforce various customer protection regulations to guarantee fair and ethical business behaviour. Most importantly, there are money protection schemes laid down to ensure traders and investors’ money in case of bankruptcy or fraud. For example, CySEC brokers’ clients can claim up to 20 000 EUR, while the British guarantees are up to 85 000 GBP per person.
ZotaTrade TRADING SOFTWARE
ZotaTrade provides various trading platforms for their customers, including MetaTrader5. We accessed all of them and reviewed in-depth the web-based software. It’s miles behind MetaTrader, and we certainly can’t recommend it to traders and investors. The EUR/USD spread is 1.7+ pips, which is slightly higher than the industry standards- 1 pip or less. The Buy/Sell difference forms part of the costs for traders, so lower rates are certainly more favourable. The FX market is a vibrant place, and it’s no hassle to find a decently regulated broker offering better trading conditions than ZotaTrade.
Speaking of platforms, see the MetaTrader4 brokers and MetaTrader5 brokers we recommend. MT is the most popular Forex platform, which seasoned traders and investors prefer for its stability. The software provides sophisticated trading tools such as Expert Advisors, Algo trading and plenty of complex indicators, to name a few. MetaTrader also created a marketplace where you can find more than 10 000 apps and third-party developed trading solutions.
The highest leverage possible is 1:400, a level overly risky for retail traders. It is a powerful financial tool improving profit potential, but it might cause losses too difficult to recover if mishandled. The high-risk leverage nature pushed many financial authorities worldwide to inflict restrictions on the brokers as customer protection measure.
So, the European, British and Australian brokers (to come in effect later in 2021) are limited to 1:30, while the Canadian brokers and the US brokers can’t provide higher levels than 1:50. The Swiss brokers aren’t restricted, but there is a 20 million francs capital requirement in Switzerland, which push scammers away.
ZotaTrade DEPOSIT/WITHDRAW METHODS AND FEES
The minimum initial deposit with ZotaTrade is $500, a requirement 5 times greater than the regulated brokers’ standards- $100 on average to open an account with real money. The accepted funding methods are Credit/Debit cards and Wire Transfers. We need to warn traders that Wire payments are final and non-refundable. That’s why we recommend bank cards funding only because it’s possible to ask for chargeback within 540 days after the deposit.
However, if you have a preferred payment system, see our lists with legit Skrill brokers, Neteller brokers, FasaPay brokers, Sofort brokers and Bitcoin brokers. The selected companies are strictly regulated, so it’s unlikely for traders to experience fraud.
There is no information about minimum withdrawal requirements, and they even fail to specify anything about the withdrawals at all. ZotaTrade presents with an exhaustive amount of legal documents, but none of them comprises much useful information related to trading conditions. The withdrawal requests are said to be processed within 3-7 days, supposedly free of charge because they do not specify any fees, as well.
After 6 months of inactivity, ZotaTrade puts the account dormant, but they do not designate any fees, either.
ZotaTrade offers bonuses starting from 30% on the deposit, but the additional provisions introduced are exceptionally unfair. ZotaTrade states that traders cannot even withdraw deposited funds unless they execute the required minimum trading volume of 40 times the bonus amount. So, whenever clients accept a bonus from ZotaTrade, they can’t pull out any sum whatsoever.
Overall, ZotaTrade is an offshore broker that’s subtly regulated by an NGO, which is not enough to consider them safe for traders. Stay safe and choose adequately regulated FX companies only.
HOW DOES THE SCAM WORK
New types of investment scams come about literally every day. However, most of the new schemes represent a modification of common fraud. These are not typical for the local markets but very similar from country to country.
Scammers usually find their victims through ads on social media or other websites, which is the latest trend. Classical tactics, such as cold calling, became less widespread as the Internet is prevalent nowadays. The offers look legit and present exciting opportunities to invest money in the Forex market. Traders are reassured that the people behind the broker have an excellent track record, promising high returns or seamless trading. They claim that there are no problems when trading with them, concealing that the FX market is utterly risky.
What usually happens is that scammers just pocket traders and investors money letting them believe they trade in a real environment. Sooner or later, clients would ask for a withdrawal, but scammers would delay or straightforward refuse to send any money back. Whenever traders persist, the guys standing behind the fraudulent broker would usually cut the communication or send a tiny amount of money. It’s also a common manoeuvre for scammers to ask for more money to sort the withdrawals out. Either way, traders are likely to lose some or all of the capital invested. At some point, when the fraud becomes evident, the scammers would simply rebrand and start afresh, creating a new scheme under a different name.
WHAT TO DO WHEN SCAMMED
Unfortunately, no one is immune to scam. What you need to do first, in case you got scammed, is to protect yourself from further risks. Contact your bank and explain to them your situation, they will give you necessary instructions to follow and will help you, if possible, recover your money.
Report what happened to you, file a complaint, contact the financial regulator, contact other government institutions related to trading and investing, call the police if you feel necessary. Seek help actively!
It’s crucial not to rush blindly trying to recover your funds because many scam recovery agencies and individuals are stalking, aiming to double scam the victims. They ask for an advanced payment but do nothing to help you recover your losses and simply pocket the money you’ve sent!
Share online your experience; it’s important to protect others, as well. Be responsible!