Beware! FinLibra 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.
FinLibra presents itself as an innovative forex broker known for complete transparency. But this clunky and non-functional website is completely unknown and completely anonymous. The little specific information that can be found on the website is contradictory and proves to be incorrect when checked. It would obviously be a bad choice to trust FinLibra with your money.
FINLIBRA REGULATION AND SAFETY OF FUNDS
The homepage of the website gives no indication who owns and operates this alleged broker. The Terms and Conditions state that the owner is FinLibra Capital Markets. But we have no reason to believe that such an entity actually exists.
In the footer we see an incomplete UK address, which is strange given that the website is not available in English but only in German.
At the same time, the text of the Terms and Conditions states that they are governed by the laws of Bulgaria.
Both the UK and EU member states such as Bulgaria have strict regulations for financial services providers. The lack of proper information about the owning company is indicative enough that FinLibra is not licensed. A check in the databases of the UK Financial conduct Authority (FCA) and the Bulgarian Financial Supervision Commission (FSC) confirmed that there is no authorized broker with such a name.
Under no circumstances should you trust your money to such anonymous websites 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 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.
FINLIBRA TRADING SOFTWARE
FinLibra claims to use a web-based trading platform and mobile app. We were unable to confirm if this is true because at the time of writing this review, the new account registration feature was not functional. Given the extremely low overall quality of the website, we doubt that FinLibra has any kind of trading software.
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.
FINLIBRA TRADING CONDITIONS
On FinLibra’s website we find descriptions of three types of Auction Accounts – Silver, Gold and Platinum. These descriptions lack details of the trading conditions. The only parameter that is specified is the leverage – up to 1:300 for forex, 1:30 for commodities and equities and 1:20 for cryptocurrencies. This in itself is proof that FinLibra could not be a licensed broker operating in the EU or the UK.
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 European Securities and Markets Authority (ESMA) and accordingly all EU regulators limit leverage to 1:30 for major currency pairs, 1:20 for non-major pairs, gold and major indices, 1:10 for other commodities and non-major indices, and 1:2 for cryptocurrencies. The same rules are followed by FCA except that the British regulator bans crypto derivatives trading altogether.
According to the FAQ section, the minimum deposit is 250 USD. For the same or often lower amount, you could open an account with multiple licensed and established brokers.
The only other information about trading conditions is a fee of 0.01% when trading cryptocurrency pairs.
FINLIBRA DEPOSIT/WITHDRAW METHODS AND FEES
FinLibra says it uses two payment methods – credit/debit card or wire transfer. The stated minimum withdrawal amount with these methods is 100 currency units. But the Terms and Conditions also specify a minimum withdrawal amount in various cryptocurrencies, which is considerably higher. The minimum of 0.026 BTC, for example, equates to over 1,000 USD at the time of writing this review.
This suggests that FinLibra uses cryptocurrencies as a payment method. This is typical of scammers because cryptocurrencies allow for anonymity and more importantly, do not allow for refunds. While there are some legitimate brokers that accept Bitcoin, they do so alongside other transparent payment methods such as credit/debit card, bank transfer or popular e-wallets like Sofort, PayPal, Neteller or Skrill.
FinLibra charges a rather hefty 5% withdrawal fee. Most legitimate brokers don’t charge transaction fees at all. FinLibra also charges an unspecified document verification fee as well as a monthly inactivity fee of 100 USD.
According to the Terms and Conditions, FinLibra offers bonuses called “additional funds”. Regulated brokers are prohibited from using bonuses and promotions. If the account has received a bonus, the withdrawal of funds is conditional on meeting very high minimum traded volume requirements – 1 lot (100,000 currency units) for every 1 USD bonus. This is a typical trap for financial fraudsters – thanks to these clauses, they can refuse your request to withdraw your money.
HOW DOES THE SCAM WORK
Unfortunately, the internet is full of scammers. In the age of cryptocurrencies, many of them pretend to be brokers and take advantage of people’s desire to get rich easily through financial instruments they don’t really understand.
Fake brokerage sites lure you in with promises to take on all the difficult and confusing aspects of investing for you. If you make contact with such sites, they will first convince you to make a small, “risk-free” investment of a few hundred dollars. Experienced scammers will then begin to persuade you to “invest” more and more money, and will even deceive you into believing that your initial investment is generating incredible profits.
But you will never see those profits or the money you deposited. These scammers hide behind fake names and offshore shell companies that are not subject to oversight and regulations like regulated brokers. They use cryptocurrencies or other shady payment methods that make refunding money difficult or often impossible. The terms and conditions of these sites are riddled with pitfalls that block withdrawals with impossible-to-fulfill conditions for minimum traded volume and extremely high fees reaching 10, 20 or more percent of the amount.
WHAT TO DO WHEN SCAMMED
If you find yourself in such a situation, you should be very careful not to fall into the clutches of other fraudsters while trying to recover your money. Offers from people on the internet who promise to get you your money back from scammers for an upfront fee are also one hundred percent scammers.
If you used a credit or debit card for the transactions to the scammers, there is some chance you can get your money back by requesting a chargeback. Visa and MasterCard allow this to be done within 540 days. But such a claim can be challenged if you have provided the scammers with documents such as a copy of your ID and proof of address.
