Beware! FrontYield 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.
FrontYield presents itself as a broker offering trading in over 500 financial instruments from 6 asset classes, with a clear focus on cryptocurrencies. However, fact checking reveals beyond any doubt that this is not a genuine broker, but a typical scam scheme aimed at cashing in on the hype surrounding Bitcoin. You should stay away from this website.
FRONTYIELD REGULATION AND SAFETY OF FUNDS
When you open a legitimate broker’s website, you can expect to see clear information about where the business is based, what licenses it holds and what regulatory regimes it is subject to. FrontYield does not provide any such information. There is not even contact information on the main page of the website, just a company name – FrontYield Inc. In the contact section we see an address in Texas, United States:
The US is the jurisdiction with probably the most stringent and high requirements for brokers, including a net capital of at least 20 million USD. To operate as a forex broker in the United States, a company must be registered as a futures commission merchant and foreign exchange dealer with the Commodity Futures Trading Commission (CFTC) and to be a member of the National Futures Association (NFA). In the NFA database cannot be found a company with the name FrontYield Inc.:
Obviously FrontYield is not a regulated broker and hasn’t even made much effort to hide this. If you want to trade cryptocurrencies or other financial instruments, it is in your best interest to use the services of a licensed broker.
Depending on your location, it is advisable to choose a company that is regulated by an institution such as Commodity Futures Trading Commission (CFTC), Australian Securities and Exchanges Commission (ASIC), UK’s Financial Conduct Authority (FCA) or some EU regulator like Cyprus Securities and Exchange Commission (CySEC).
Clients of these brokers receive protections such as negative balance protection and segregation of the client’s funds from the broker’s funds. In the EU and the UK, brokers must also participate in guarantee schemes that cover a certain amount of the trader’s investment if the broker becomes insolvent. These guarantees amount to up to 20 000 EUR in the EU and 85 000 GBP in the UK.
FRONTYIELD TRADING SOFTWARE
The website claims that FrontYield offers several trading platforms, including one of the most widely used in the industry, MetaTrader 5 (MT5). However, after registering an account and logging into the client portal, we only see a very basic web platform that is definitely not MT5:
The platform only features cryptocurrencies and there is no trace of the hundreds of other financial instruments promised by the website. Basic features like placing pending orders are also missing. This is not a functioning platform at all, but an imitation designed to fool people who have no idea about this type of trading and don’t know what to expect.
It is advisable to contact one of the many legitimate brokers that offer MT5 or the still very popular MT4. These platforms have established themselves as leaders because they offer a wide range of features, including a wide variety of options for customization, multiple account usage, designing and implementing custom scripts for automated trading and backtesting trade strategies.
FRONTYIELD TRADING CONDITIONS
FrontYield differs from legitimate brokers and even from most brokers in that it provides absolutely no information about the parameters of the trade it pretends to offer. Nowhere does it mention leverage, spread, commissions or minimum deposit.
Only the footer of the website lists a few types of trading accounts – Standard, ECN and even “Family” – but there is no further information about them.
Licensed brokers offer different packages tailored to the needs of clients with different capital and experience. Many of the legitimate brokers offer favorable terms for novice traders, including micro accounts with very low minimum deposit.
The only specific information that can be seen on the website actually further proves that FrontYield is not a legitimate broker. Again in the footer we see the claim that FrontYield offers a deposit forex bonus of up to 50%. Regulated brokers are prohibited from using bonuses and promotions.
FRONTYIELD DEPOSIT/WITHDRAW METHODS AND FEES
After registering an account, however, it becomes clear that the only way to deposit funds is to send money to a FrontYield-designated bitcoin wallet.
Scammers prefer cryptocurrencies because these transactions are not subject to refunds. If you are interested in licensed brokers that accept cryptocurrencies as a means of payment, take a look at this list.
The text of the Terms and Conditions mentions withdrawal fees, which depend on the amount being withdrawn. However, nowhere in the Terms and Conditions or on the website is there specific information about these or other fees and commisions.
HOW DOES THE SCAM WORK
Many people are looking for ways to make money passively, but do not have the necessary knowledge to invest in the financial markets themselves. This makes them a target for the many online scammers posing as brokers. If you come across some of them and give them your contacts, you will be contacted by skilled scam artists who will assure you that they can take on the incomprehensible aspects of investing for you. You will only be required to invest and take profits.
But when you try to collect even just a fraction of your money, it will turn out to be impossible. Your supposed profits will suddenly evaporate, or you’ll find that you have to meet impossible traded volume requirements first. Fraudsters often insert huge withdrawal fees into client agreements amounting to 10%, 20% or even more. You won’t be able to hold scammers accountable because they hide behind fake names and shell-companies offshore. Scammers also typically use non-refundable payment methods.
WHAT TO DO WHEN SCAMMED
First of all, you should be very careful not to fall straight into the clutches of other scammers. Another common scam is to promise money recoveries from fake brokers for an upfront fee.
If you used a credit or debit card for the transactions, you can charge a chargeback. Visa and MasterCard have a long period in which they allow such requests – 540 days. But keep in mind that fraudsters can dispute if you have provided them with a copy of your ID and proof of address. It would also be helpful if you alerted the authorities in your country and other people online to the activities of the scammers.