Beware! WhiteFX 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.
WhiteFX presents itself as both a cryptocurrency trading platform and a forex broker. On the website one can see completely different claims about the assets it supposedly trades (“over 10 Currency and Stocks“ in one place, “ 8 asset types and more than 12,000 instruments for trading” in another) as well as the number of supposed clients (13,000 in one place, outlandish “over 800,000” in another). But most worryingly, the same ambiguities and contradictions also affect where the firm is actually located and what regulations it is subject to.
All clues point to this not being a broker offering investment intermediation at all, but another fraudulent scheme trying to capitalize on the excitement around cryptocurrencies and the general public’s ignorance about financial assets and markets.
WHITEFX REGULATION AND SAFETY OF FUNDS
It is difficult to be sure which is the legal entity behind WhiteFX. There is no company listed on the website or in the Terms and Conditions, which is unacceptable for a legitimate business. А company name – “Whitetzfx Limited” can be seen only in the “Risk Disclosure” section.
This company is stated to be located in Saint Vincent and the Grenadines. This offshore zone is notorious as a favorite location for scammers posing as brokers. While this country has a financial regulator, unlike other offshore areas, it does not regulate the activities of forex and CFD brokers.
Тhe Financial Services Authority (FSA) of St. Vincent and the Grenadines has repeatedly issued warnings on this issue, with the latest such warning dated 23 June 2021. It clearly states that the agency “does not issue any licenses to carry on the business of FOREX Trading or Brokerage or Binary Options Trading nor does the FSA “Regulate, Monitor, Supervise or License” International Business Companies which engage in such activities”.
This in itself is proof enough that WhiteFX is not a regulated broker and should be avoided. But the ambiguity surrounding WhiteFX does not end there. On the website one can also see a claim that WhiteFX has an “IFSC license”. This should probably mean the International Financial Services Commission of Belize. However, no licensed broker with the name WhiteFX or Whitetzfx Limited could be found in this regulator’s register.
A UK contact address is given on the website and a statement can be seen that the broker’s head office is in London.
To operate in the United Kingdom, a brokerage firm must be licensed by the Financial Conduct Authority (FCA). Unsurprisingly, WhiteFX/Whitetzfx Limited is not among the brokers supervised by this institution:
Curiously, the registration confirmation email sent by WhiteFX shows an address in Seattle, USA:
And in the text of the Terms and Conditions, a technical support email can be seen for a completely different domain. This email is linked to another site with a London address and registration in Saint Vincent and the Grenadines – hugosway.com. This site looks just as fishy as WhiteFX, and is probably just another project of the same scammers.
Under no circumstances should you trust your money to such anonymous sites full of false and contradictory information. Instead, you can turn to one of the many companies that really work under the supervision of respected regulatory bodies Cyprus Securities and Exchange Commission (CySEC) or Financial Conduct Authority (FCA) in the UK. As their customer you will enjoy a number of guarantees including negative balance protection and guarantee for your funds if the broker goes bankrupt, which goes up to EUR 20,000 in EU and 85,000 GBP in the UK. Regulations in the UK and EU include some important measures designed to improve investor protection and promote market integrity and transparency, such as transaction reporting. Regulated brokers are also required to segregate their operational funds from the client’s money.
WHITEFX TRADING SOFTWARE
The website claims that WhiteFX offers multiple online trading platforms that give customers “flexibility and choice of trading on your desktop, tablet or mobile”. Among the advertising slogans can also be seen “Trade your favourite FX and Crypto Pairs MT4 backed by true ECN connectivity”. This suggests that WhiteFX claims to offer MetaTrader 4 (MT4), which is the most widely used platform in the industry.
After logging in with a registered account, however, it can be seen that WhiteFX does not have a functioning trading platform at all. The client dashboard only has embedded charts with current bitcoin and currency quotes from the site TradingView.
There are more than enough legitimate brokers that offer their clients the MT4 experience. This platform is the most widely used in the industry for a reason, because it offers diverse functionality, including the use of custom scripts for automated trading and back-testing of trading strategies.
WHITEFX TRADING CONDITIONS
WhiteFX does not offer different account types, which is standard practice for forex brokers. The stated minimum deposit is USD 500, which is higher than the usual industry levels. Most legitimate brokers offer micro accounts and a minimum deposit of USD 100.
WhiteFX promises “ultra-tight spreads, starting at 0.0 pips”, but this claim cannot be verified in the absence of a trading platform. On the website it is stated that WhiteFX offers trading Bitcoin CFDs with leverage of up to 1:5.
This is also a clear sign that WhiteFX is not a regulated broker, especially one operating from UK or EU territory. In 2020, the FCA banned trading of cryptocurrency CFDs altogether. The European Securities and Markets Authority (ESMA) in turn limits leverage when trading such instruments to 1:2. Higher leverage allows for higher sales, but the associated risk is too great, especially with volatile assets like cryptocurrencies.
WhiteFX also offers bonuses to their clients, which is also prohibited for brokers in the UK and EU.
WHITEFX DEPOSIT/WITHDRAW METHODS AND FEES
WhiteFX’s website promises the ability to “choose the payment system according to your convenience, not cost effectiveness”. However, the only options on the deposit menu are cryptocurrencies – Bitcoin and Etherium.
While there are legitimate brokers that accept payments with Bitcoin, they do so alongside other options such as bank transfer, credit cards, and digital platforms like PayPal or Neteller. Cryptocurrencies as the only option is a big red flag. Scammers prefer to use cryptocurrencies because these transfers are non-refundable.
The deposit system accepts amounts lower than the stated minimum deposit of USD 500. According to the Terms and Conditions, the minimum withdrawal amount is USD 50. The FAQ section states that WhiteFX charges withdrawal fees, but nowhere is specified what those fees are.
There is also a hefty fee for inactive accounts of USD 500, which is imposed if the client has not traded within the last 6 months.
HOW DOES THE SCAM WORK
The online space is full of ads promising easy money. They sound too good to be true, because they are not – they are outright scams. Many of these fraudsters pose as brokers and take advantage of the general public’s ignorance of the capital markets.
If you give your contact details to one of the flashy sites promising to make you rich, you will be contacted by experienced scammers who will start convincing you to “invest” in their scheme. Initially they will ask for a small amount, say USD 250 or USD 500. If you agree, they will begin to persuade you to give them larger sums.
However, your money will never be truly invested in the market, and you will not be able to receive either the supposed profits or the money from your deposit. Your attempts to withdraw your money will be blocked by deliberately confusing clauses in the terms and conditions. Some of the most commonly used traps are extremely high minimum trading volume requirements or withdrawal fees equal to 10%, 20% or more of your funds.
WHAT TO DO WHEN SCAMMED
It is very important not to rush into trusting people on the internet who offer to magically refund your money for a fee. These are also scammers, and they may even be the same ones who scammed you in the first place.
If you have made the transfers using credit or debit card, you can claim a chargeback. Visa and MasterCard allow this to be done within 540 days. However, such a request may not be approved if you have given the fraudsters documents such as a copy of an ID and proof of address. This will allow them to claim that the transaction is legitimate and approved by both parties. Wire and cryptocurrency transfers unfortunately are not refundable.