Beware! Mekness 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.
Mekness is a somewhat dubious offshore forex broker. While it seems more legitimate than many of the websites we reviewed, due to some inconsistencies and missing legal information we can’t rule out the possibility that it’s a scam. Unfavourable trading conditions and high and vaguely described fees are an additional argument to avoid Mekness
MEKNESS REGULATION AND SAFETY OF FUNDS
Mekness is owned and operated by Mekness LLC, a company incorporated in the St. Vincent and Grenadines (SVG):
Verification confirms that such a company exists. However, registration in the SVG does not mean that it is a “globally regulated broker” as the Mekness website claims. Because of the lack of regulatory norms and oversight, SVG is one of the favorite bases of operations for shady 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.
Some large brokerage firms are opening subsidiaries in offshore jurisdictions such as SVG in order to compete more effectively in the unregulated emerging markets of Asia and Africa. In these cases, however, it is assumed that offshore firms will follow good business practices so as not to damage the brand image.
It should also be noted that Mekness’ website is completely identical to another offshore broker we have reviewed – DMA Capitals.
If you have decided to start investing in financial instruments, the best solution would be to approach 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. However, the likelihood of such a bankruptcy is low because regulators also have significant net capital requirements that companies must maintain – EUR 730 000 in UK and Cyprus, AUD 1000 000 in Australia and at least 20 million USD in the United States.
MEKNESS TRADING SOFTWARE
Mekness uses one of the most widely used trading platforms in the industry, MetaTrader 5 (MT5). The software is available for Windows, Android and iOS operating systems. Here’s what the desktop version looks like:
Again, we would recommend using the services of one of the many regulated brokers that offer clients 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.
MEKNESS TRADING CONDITIONS
The Mekness website describes four types of trading accounts – Standard, Universal, Pro and VIP. The minimum deposit for all is the same – 10 USD. You should know that nowadays many regulated brokers also allow creating accounts with a symbolic minimum deposit.
According to the account description, the Standard account has no commission, but has a minimum spread of 1.8 pips, which is relatively high. In the MT5 platform, we saw a spread of 2 pips for the benchmark currency pair EUR/USD using a Standard account. In the industry, a spread above 2 pips is considered too disadvantageous for the trader.
The universal account offers a lower pip of 1.1 pips, but has a commission of 7 USD per lot. This means that with both accounts, the trader will have to pay 18 USD per lot traded, and that’s if the spread matches what the website promises. The other accounts promise lower spreads and commissions that are more competitive.
A maximum leverage of 1:500 is specified for all accounts. The MT5 platform has a lower level set, 1:100, but this is also higher than allowed for licensed brokers. 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. EU regulators limit leverage to 1:30 for trading in major currency pairs and even lower levels for more volatile assets. The same rules are followed by FCA and ASIC. In the USA and Canada the maximum leverage is slightly higher, 1:50.
MEKNESS DEPOSIT/WITHDRAW METHODS AND FEES
But in the deposit menu itself, the choices are different – BankTransfer is missing, credit cards are stated as “coming soon”, and of the e-wallets listed, only PerfectMoney is available. The other options are various cryptocurrencies.
Such a discrepancy between advertised and available payment methods, as well as an emphasis on cryptocurrencies, is typical of scam websites. Scammers prefer cryptocurrencies because these transactions are not subject to refunds.
Things get even muddier when we look at the fees. The minimum withdrawal amount is 50 USD and withdrawing a smaller amount is charged a 10 USD fee. In addition, we find the following vague and confusing description of a minimum traded volume requirement on the website: “if a withdrawal is requested before commencing 3.0 – 1 K, 15% withdrawal fees applied”:
As there are no publicly available Terms and Conditions, there is nowhere to look to decipher this wording. But it certainly looks like another typical fraudulent practice – setting prohibitively high minimum traded volume requirements and huge withdrawal fees.
HOW DOES THE SCAM WORK
Many people have a desire to invest in the financial markets but lack the necessary knowledge and experience. This makes them a potential victim of the many internet scammers posing as brokers and investment intermediaries. These types of scams have exploded alongside the cryptocurrency boom.
If you trust such a website and give them your personal information, you will be contacted by experienced scammers who will entice you with promises of easy profits. The scammers usually offer to take over all aspects of investing for you, sometimes even prompting you to install remote access software on your personal computer. After investing an initial low amount, they will convince you that you are already making incredible profits and urge you to invest more.
But you will never get the promised profits, nor will you be able to get your money back. If you want to withdraw funds from your account, you will find that you have suddenly lost everything in the market, or that you have to meet impossibly high traded volume requirements, or that you have to pay huge fees. It is also possible that fraudsters simply disappear because they hide behind fake names and shell companies in offshore areas that are not subject to any control and regulation.
WHAT TO DO WHEN SCAMMED
One of the few options to get at least some of your money back in such a situation is to ask for a chargeback. But this is only possible if you have used a credit or debit card for the transaction. Scammers typically use cryptocurrencies or dubious e-wallets that make it impossible to get your money back.
Under no circumstances should you trust people and websites that promise to magically refund your lost money for an upfront fee. This is also a well established scam. You may even fall victim to the same scammers again.