AAX review – 5 things you should know about www.aax.com

AAX review – 5 things you should know about www.aax.com

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Beware! AAX is an offshore broker! Your investment may be at risk.

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AAX is one of the many websites on the internet that promises to help you get rich by trading cryptocurrencies. But as is the case with most of these websites, it is not advisable to rush into trusting AAX. The offshore company allegedly behind AAX does not have the necessary licenses to offer trading in financial instruments. Much of the information on the AAX website is dubious and we cannot say for sure that it is not a scam.

AAX REGULATION AND SAFETY OF FUNDS

The home page of the website doesn’t include a company name, address or disclaimers about the risk of trading financial instruments – things you would see with any legitimate broker. The only means of contact is the AAX social media pages.

According to the Terms and Conditions, the website is owned by AAX Limited, a company based in Seychelles.

At the same time, however, we find the contradictory statement that “These Terms of Use and any non-contractual obligations arising out of or inconnection with it shall be governed by, and construed in accordance with, England and Wales law”.

We were unable to locate AAX  Limited among the companies authorized by Seychelles Financial Services Authority or UK Financial Conduct Authority. So even if this company exists, it is not authorized to provide financial services and products – even in the offshore Seychelles, where broker requirements are minimal.

There is a clause in the legal documentation that AAX ‘s clients in Singapore are serviced by another company, AX Exchange (Malta) Limited. But this firm is also not a licensed broker. A check of the Monetary Authority of Singapore (MAS) database shows that the firm is only temporarily authorised to provide certain payment services without a licence.

If you intend to start trading cryptocurrencies or other financial instruments, it is highly recommended that you use the services of a licensed and regulated broker – especially if you are a beginner. Depending on your location, it is advisable to choose a company that is regulated by an institution such as Commodity Futures Trading Commission (CFTC) in US, 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.

AAX TRADING SOFTWARE

AAX promises advanced trading software, but in practice offers a rather rudimentary web-based platform. The charts in this platform are taken for free from the TradingView data provider. The menu for buying and selling cryptocurrencies gives a technical error when we try to enter parameters for a transaction.

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.

AAX TRADING CONDITIONS

The main service offered by AAX  is cryptocurrency trading – both spot and futures. It should be noted that this type of trading is prohibited for UK retail traders, which makes the aforementioned Terms and Conditions clause even more suspicious.

AAX offers extremely high and risky levels of leverage – up to 1:100. Regulated brokers do not offer such high leverage even for low volatility assets such as major currency pairs. In the EU and other leading markets such as Australia, the maximum leverage allowed for crypto assets is 1:2, and in the US it is 1:5. AAX also offers various bonuses, promotions and prize games – practices prohibited by all major financial regulators.

For spot trading AAX charges significant Maker and Taker fees of 0.1% and 0.15%. Trading fees for crypto futures are lower and depend on the specific cryptocurrency.

The minimum deposit also depends on the cryptocurrency used – for example 20 USDT, 0.001 BTC or 0.01 ETH. The minimum deposit also depends on the cryptocurrency used – for example, 20 USDT, 0.001 BTC or 0.01 ETH. At the time of writing this review, this is equivalent to 20-30 USD. You should know that many licensed brokers, including industry-leading brands, allow you to create a starter account with similarly low amounts.

AAX DEPOSIT/WITHDRAW METHODS AND FEES

As you might expect, depositing money with AAX is mainly done via cryptocurrencies, but there is also an option to deposit with fiat currencies via the providers Advcash and Epay. But here the minimum deposit is higher – 100 USD.

Licensed brokers typically offer clients a wide choice of transparent payment methods, including bank transfer, credit/debit cards and established e-wallets such as PayPal, Skrill, Neteller UnionPay. If you are interested in licensed brokers that also accept cryptocurrencies as a means of payment, take a look at this list.

AAX states that it does not charge a fee for deposits. But there is a withdrawal fee, varying according to the cryptocurrency used – 8 USDT, 0.0004 BTC or 0.005 ETH.

HOW DOES THE SCAM WORK

Stories of people getting rich from cryptocurrencies tempt many to try their luck in the financial markets. But you have to be very careful not to fall into the clutches of the many scammers lurking in the online space. These scammers only pose as brokers and lure you in with promises to take on the confusing aspects of investing for you.

If you make contact with such scammers they will first convince you to give them a small initial sum of a few hundred dollars. They may even fool you for a while that your investment is generating incredible profits to convince you to give them a larger amount. But your money won’t really be invested. And when you try to withdraw your supposed profits or even your deposit, you will find that it is impossible.

The scammers may tell you that all your investments have been lost by a sudden change in the market. Or they’ll point you to clauses hidden in their Terms and Conditions that say withdrawing your money is only possible after you meet impossibly high minimum trading volume requirements. And they can simply disappear because these scam sites hide behind fake names and offshore companies that are not subject to rules and regulations.

WHAT TO DO WHEN SCAMMED

If you find yourself a victim of scammers, you should inform the relevant authorities in your country and spread the word online to warn other potential victims. However, the chances of getting your money back are not high.

If you used a credit/debit card for the transactions, you could ask for a chargeback. However, such requests can be disputed if you have provided the fraudsters with proof of identity such as a copy of an ID. Under no circumstances should you trust people on the internet who claim they can recover your money for an upfront fee. These too are certainly scammers.

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