Beware! Fuhuifex 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.
Fuhuifex, or Fuhui Fx Limited, presents itself as a leading forex and CFD broker. These claims look dubious even at first glance because of the extremely low quality of the website.
A fact check quickly reveals that Fuhuifex is not a licensed broker. It is in fact just one element of a whole network of questionable websites that should be avoided.
FUHUIFEX REGULATION AND SAFETY OF FUNDS
As mentioned, the Fuhuifex website is of very low quality. It is obviously aimed mainly at Asia – it is available in Chinese and the English version is a very poor translation.
If you go to a legitimate broker’s website, you can expect to see detailed information about its legal status, what licenses it has and which regulatory bodies oversee its activities. Fuhuifex does not provide any such information. The website doesn’t even list an address, and the only contact information is an email.
The company listed as the owner of the website is Fuhui Fx Limited. The same name also pops up behind other dubious websites posing as brokers, for example fuhwold.com and fhlead.com.
The only sort of legal documentation that can be found in the website is named “User’s guide”. It is stated there that “the use of the website is governed only by Swiss law and will be interpreted in accordance with Swiss law”. To operate in Switzerland, a broker must be licensed by the Swiss Financial Market Supervisory Authority (FINMA). However, the Fuhui Fx Limited cannot be found in the institution’s register.
The “About” menu on the Fuhuifex trading platform lists a company address in London, United Kingdom:
But Fuhuifex cannot be found in the database of the UK regulator, Financial Conduct Authority:
Fuhuifex is clearly not a licensed and regulated broker, but yet another anonymous scam scheme. 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 like 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.
FUHUIFEX TRADING SOFTWARE
For all its dubiousness, Fuhuifex has trading software – MetaTrader 5 (MT5), one of the most widely used platforms in the industry.
Fuhuifex does not provide login credentials to the platform after account registration, so we were only able to test the software’s functionality with a Demo account. Here’s what it looks like:
However, the presence of a trading platform does not make Fuhuifex any more credible. 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.
FUHUIFEX TRADING CONDITIONS
The Fuhuifex website mentions three types of trading accounts – Standard, Premium and Prime. They are tied to investments of 1,000 USD, 10,000 USD and 50,000 USD respectively. In comparison, most licensed brokers offer starter accounts with a minimum deposit of just 100 USD or even less.
On the website there is a table with minimum spreads for individual financial instruments. For the benchmark currency pair EUR/USD, a spread of 1.7 pips for a Standard account is indicated. This is not far off the industry average, but on the MT5 platform we saw significantly higher levels of around 3 pips. A spread above 2 pips is considered too high and disadvantageous to the trader.
A leverage of 1:100 is set for all account types. This in itself indicates that Fuhuifex could not be a licensed broker operating in the UK or Switzerland. High leverage creates the opportunity for more significant profit, but correspondingly increases the risk of sudden and excessive losses. All leading regulators therefore restrict leverage for retail traders. The FCA, like EU regulators, limits leverage to 1:30 for trading in major currency pairs and even lower levels for more volatile assets. In the US, the maximum limit is slightly higher at 1:50.
FUHUIFEX DEPOSIT/WITHDRAW METHODS AND FEES
Fuhuifex’s website does not provide any information on available payment methods and fees for deposit and withdrawal of funds. After registering an account, we get access to a deposit menu which has two options – bank transfer and digital currencies, namely Bitcoin, Ethereum and Tether. However, both of these options are not active unless the account is verified by providing a copy of ID.
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.
HOW DOES THE SCAM WORK
Scammers who promise easy money without any effort are nothing new, especially on the internet. But given the excitement around bitcoin and cryptocurrencies in recent years, malicious actors have run rampant more than ever, capitalizing not only on people’s desire to solve their financial woes with a magic wand, but also ignorance and misunderstanding of how blockchain and complex financial instruments actually work.
If your curiosity is stirred by one of the many flashy websites promising easy riches, and you provide your contacts, you will soon be contacted by skillful and persuasive scammers who will convince you to start with a relatively small and “risk-free” investment. If you agree to this, you will be transferred to even more skilled at convincing scammers, who will persuade you to invest even more. Any money you give to such people is money you are unlikely to get back.
Any attempt to withdraw deposits or alleged profits will be hampered by numerous and significant fees, as well as harsh and often prohibitive conditions written into the terms and conditions – such as high trading volume requirements, unexpected “taxes”, or withdrawal fees as high as 10% or even 20% of your funds.
WHAT TO DO WHEN SCAMMED
When you find yourself scammed and seek advice and help online, you are likely to receive offers from individuals and companies who promise to refund your money for a fee that you have to pay in advance. Don’t trust such offers or recommendations from anonymous commentators on the internet – this is also a well established scam.
The best chance to get at least some of your money back is to request a chargeback, but this applies only if the transfer is made via credit card. It is of course advisable to notify the relevant authorities of the fraudsters’ activities and to spread the word online to warn other people who may fall victim to the same scammers.