Beware! StockFX Profit 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.
The StockFX Profit website greets us with claims that this is “a pioneer in online trading” and “award-winning global organisation”. However, fact-checking quickly reveals that these boasts are far from the truth. This is an anonymous website that only imitates a broker and is designed to scam inexperienced people out of their money. If you don’t want to fall victim to fraud, stay away from StockFX Profit.
STOCKFX PROFIT REGULATION AND SAFETY OF FUNDS
The first obvious sign that StockFX Profit is not a legitimate business is that nowhere is the name of the company that owns and operates this website mentioned. There are no Terms and Conditions or any other legal documentation. There is also no disclaimer about the risks of trading financial instruments, which brokers are required to display on their websites. It shouldn’t have to be said, but it’s not a good idea to trust your money to completely anonymous websites that hide their terms of service.
StockFX Profit claims to have offices in two of the jurisdictions with the most rigorous brokerage regulations – the United Kingdom and the United States:
On the website we even see the claim that StockFX Profitis regulated by the FCA – presumably UK’s Financial Conduct Authority. But a search for StockFX Profit in the FCA database finds no broker’s license but a warning that this website offers financial services without authorization:
To operate as a forex broker in the United States, a company must be registered with the Commodity Futures Trading Commission (CFTC) and to be a member of the National Futures Association (NFA). Nothing can be found in the NFA registry about StockFX Profit. So obviously the claims of StockFX Profit being a regulated broker are a lie.
If you have decided to start investing in the financial markets, you need to make sure that the brokers you work with are indeed licensed and supervised by institutions such as CFTC, FCA or another reputable regulator such as 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 and at least 20 million USD in the United States.
STOCKFX PROFIT TRADING SOFTWARE
On its website StockFX Profit promises trading with multiple platforms for Windows, Mac and mobile devices. After registering an account, however, it becomes apparent that StockFX Profit does not have any trading software. In the client portal there are only a few charts with current asset prices taken for free from the TradingView website. This is the cheapest possible imitation of a trading platform and shows that the scammers behind StockFX Profit are targeting people without any experience and knowledge of trading.
Legitimate brokers offer clients a wide selection of trading software, including desktop, mobile apps and web-based platforms. The most widely used platforms in the industry are MetaTrader 4 (MT4) and MetaTrader 5 (MT5). These platforms have established themselves as industry standard because they offer a wide range of features, including a variety of options for customization, multiple account usage, designing and implementing custom scripts for automated trading and backtesting trade strategies.
STOCKFX PROFIT TRADING CONDITIONS
In the terms of trading described in the website, we find further confirmation that StockFX Profit could not be a licensed broker. The website claims that in addition to forex and CFD trading, StockFX Profit also offers binary options trading. This type of simplified trade with financial instruments is associated with a lot of scams and exploints, which is why it was banned by many regulators, including the FCA.
StockFX Profit promises “ultra-competitive spreads and commissions”, but given the lack of a trading platform these statements mean nothing. A more specific level is specified for leverage – 1:500.
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.
Instead of different types of trading accounts, the StockFX Profit offers vaguely described investment plans promising incredibly high returns. The website lists 500 USD as the minimum investment amount, the client portal lists 50 USD. It is far wiser to go to a licensed broker, many of which offer starter accounts with a minimum deposit of 100 USD or even less.
STOCKFX PROFIT DEPOSIT/WITHDRAW METHODS AND FEES
StockFX Profit’s deposit menu has a single option – Bitcoin. Cryptocurrencies are the payment method of choice for most scammers because transactions are difficult to track and non-refundable. While there are some legitimate brokers that accept Bitcoin, they do so alongside other transparent payment methods.
In the withdrawal menu there is seemingly more choice – besides Bitcoin there is an option for Ethereum, Litecoin and bank transfer. The minimum withdrawal amount is 100 USD with Litecoin and 10 USD with the other methods. The maximum withdrawal amount is 10,000 USD with Bitcoin and Litecoin and 2,100 USD with Ethereum and bank transfer. There is also a 2% fee for withdrawals with Bitcoin.
But you should be aware that if you have made the mistake of investing money in scammers like StockFX Profit you are unlikely to be able to make any withdrawals.
HOW DOES THE SCAM WORK
Fake brokers are a type of scam that has spread especially rapidly in recent years, aided by the excitement surrounding cryptocurrencies. People looking for ways to make money online can very easily come across one of the many scam websites of this type. Scammers are very skilled at convincing people to invest – first small amounts of a few hundred dollars, and then larger sums of money. Some of the scam schemes are quite elaborate and even use trading software to convince victims that their money is actually being invested and even racking up profits.
But when you ask to withdraw those winnings, or even your deposit, you’ll find it’s impossible – you’ll be told that a sudden change in the market has wiped out all your money, or that you have to meet impossible minimum trading volume requirements and pay huge fees and commissions hidden in the terms and conditions. Fraudsters can also simply disappear because they use fake names and offshore shell companies for their operations.
WHAT TO DO WHEN SCAMMED
If you find yourself scammed, the first thing you should do is notify the financial authorities in your country about the scammers’ activities, and spread the word online to warn other potential victims.
Your options for getting your money back are limited. If credit or debit cards were used for the transactions to the scammers, you have the option to request a chargeback. Companies like Visa and MasterCard now allow such requests to be made up to 540 days after the transaction. But keep in mind that if you have provided proof of your identity to the fraudsters, they may dispute that the transaction was voluntary. In addition, fraudsters typically use cryptocurrencies and shady e-wallets that do not allow refunds.
Victims of scams are often targeted by another type of online fraudsters who promise that their money can be refunded for an upfront fee. Under no circumstances should you trust such offers.