Beware! THEHOTFX 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.
THEHOTFX claims to be a licensed broker based in the United States. However, the firm’s website is full of big red alerts that this is not the case and that it’s actually a scam. There is no evidence whatsoever that the company really offers the services it claims, while there are many reports that it is trying to defraud people out of their money. So it’s safe to say you should not trust them with your funds.
THEHOTFX REGULATION AND SAFETY OF FUNDS
THEHOTFX provides a contact address in a suburban neighborhood in Long Island, New York. It also claims that it is a regulated broker and as such is required “to adhere to strict financial stipulations”, including “regular internal auditing and external monthly monitoring by a certified public accountant”. THEHOTFX also claims that it is a member of the Investor Compensation Fund and is subject to maintaining minimum capital requirements. These wordings without specifics are probably intended to give the impression that this is a broker operating in the most strictly regulated market in the world – that of the United States. But this is obviously not the case. A US-based brokers must be registered with the National Futures Association (NFA) and regulated by the Commodity Futures Trading Commission (CFTC). A check in the official register predictably shows that there is no broker with that name:
Any doubt that this is not a legitimate U.S. broker evaporates if one reads the curious disclaimer in the footer of the website: “This information is intended for investors outside the United States who are not US/Japanese citizens and residents. This website is intended for informational purposes only. This website is not directed at any jurisdiction and is not intended for any use that would be contrary to local law or regulations”.
Here you can find a list of legitimate brokers operating under the supervision of US regulators. These companies are subject to one of the highest capital requirements for financial services providers worldwide. US brokerages must maintain a net capital of at least $20 million to make sure that they are well-capitalized to ensure they can meet any costs and protect investors from unfavorable events. They must also comply with strict accountability and transparency rules and with various activity restrictions designed to protect small investors.
THEHOTFX provides no factual information about its legal status. The “About Us” section is filled with basic explanations of what the various types of assets the broker purportedly trades are:
THEHOTFX TRADING SOFTWARE
THEHOTFX оffers a web platform and custom terminal for Windows. The web platform is rather basic and lacks many features that have come to be expected in the most used solutions in the industry like MetaTrader 5 – ability to use multiple accounts, diverse customisation options for the user interface and individual charts, advanced automatisation features and possibility to use scripts and trading bots.
Here is what it looks like:
For its part, the custom terminal, like the THEHOTFX itself, is questionable and the installation file is missing key credentials. We recommend you follow the operating system’s warnings and not install it. Instead, you can turn to a truly regulated broker that offers modern and widespread platforms such as MetaTrader 4 or MetaTrader 5.
THEHOTFX offers four types of accounts – Silver, Gold, Platinum and VIP Club. Instead of the usual minimum deposit, accounts are presented as linked to a range of cash amounts starting from EUR 500-5,000 for Silver to over EUR 100,000 for VIP Club. In any case, this far exceeds industry-established levels – most legitimate brokers make it possible to open micro accounts for as little as 100 USD or EUR. No information is provided on the leverage, spread or other trading-related metrics. Instead, features like “video tutorials” and “VIP support” are listed as differences between the types of аccounts.
Elsewhere on the site you can find information that the offered spread is from 0.0 pips, but the actual levels in their web platforms are more close to 3 pips. From the options in the web platform it is understood that the leverage is 1:200 – and this is another proof that this is not a real broker registered in the US, because regulations there limit leverage to 1:50.
THEHOTFX DEPOSIT/WITHDRAW METHODS AND FEES
In an attempt to lend credibility, THEHOTFX has put on its website the logos of respected and well-known payment services and banking institutions such as PayPal, Neteller, Skrill and CitiBank. But in fact it does not look like the clients can use these services. After logging into the system there are also assurances that deposits and withdrawals can be made via CashU, wire transfer and online payment services, but the only active option is to enter your credit/debit card information. We strongly recommend that you do not do this – there is a clause in the site’s lengthy terms and conditions that states: “THEHOTFX has the right to levy a monthly tax of $36 if a user does not make a single trade for 30 days in a row”. So if you have given your details you will be charged significantly even if you have not made any trades. The terms also include an option for THEHOTFX to collect additional fees, up to $15 per transfer.
Potential customers are also offered bonuses. It is initially stated that the withdrawal of money related to a bonus is tied to “making of $500 000 worth of trades in round turns for each $50 bonus offer granted”. This amounts to $10 000 worth of trades for $1 bonus. Several paragraphs below, however, different requirements are set out – “in order to withdraw your bonus plus indicial deposit you must execute a minimum trading volume of $20,000 for every bonus dollar”. Note that this also applies to the initial deposit. But it’s not the terms that are the problem – bonuses and promos have long been banned by all major regulators, so this is further proof that THEHOTFX it’s not a legitimate broker.
HOW DOES THE SCAM WORK
Unfortunately, for every licensed broker, there are dozens, if not hundreds of offshore registered and unregulated firms whose sole purpose is to scam gullible people. They recruit through attractive online ads, promising easy money for minimal effort. Once you have provided your details and they contact you, you fall into the hands of experienced scam artists, who confidently charm you until they con you out of real money in exchange for empty promises. Any attempts to recoup your initial deposit or additional investment will be blocked by confusing explanations and the catches written into the terms and conditions of the contract, such as hefty additional taxes and fees, amounting to 10% or 20% of your funds.
WHAT TO DO WHEN SCAMMED
The best chance to get at least some of your money back is to contact the bank or card company where the payment was made and ask for cashback. But there is no guarantee that your application will be approved, especially if you have provided your personal details like a copy of ID or proof of address to the scammers. It is important not to pay attention to offers from online companies to return your money in exchange for an upfront payment, because it is almost certain that they are also scammers.
