Beware! GlobelFX 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.
GlobelFX wants us to believe it is a “highly regulated, licensed brokerage firm”. But even a cursory inspection reveals that to be a lie. GlobelFX is actually a completely anonymous and unregulated website that is designed to scam you out of your money. At the time of writing this review, GlobelFX lacks basic functionality such as the ability to create a new account. It is possible that GlobelFX has already been abandoned because it has come into the sights of financial regulators. But it’s important to know how to identify fake brokers like GlobelFX.
GLOBELFX REGULATION AND SAFETY OF FUNDS
The first and most telling warning sign is that it’s a complete mystery who is behind GlobelFX. The website does not name the owning company. GlobelFX does not provide access to any legal documentation, which in itself is also a big red flag. So you don’t know exactly who you’re dealing with, nor what the terms of the deal are. You shouldn’t trust anonymous websites when investing your money.
GlobelFX claims that the unnamed company behind the website is based in Saint Vincent and the Grenadines (SVG). Even if this is true, it negates the claims on the homepage that this is a regulated broker that guarantees the safety of its clients’ funds.
While this country has a financial regulator, unlike other offshore areas, it does not regulate the activities of forex and other types of 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 3 february 2022.
GlobelFX’s activities have come to the attention of one of the world’s leading regulators, the U.K. Financial Conduct Authority (FCA). The entity warns that this website offers financial services and products without authorization:
If you want to trade on financial markets without being scammed, you can turn to some of the legitimate brokers that actually operate from established financial hubs like the UK. These brokers have to meet stringent requirements for financial stability and transparency of operations. They must provide clients with negative balance protection and to participate in a guarantee fund that covers up to GBP 85,000 of a client’s investment should the broker go into insolvency. These brokers are also required to keep their clients’ money segregated from their own operating funds in separate bank accounts.
GLOBELFX TRADING SOFTWARE
GlobelFX claims to offer traders MetaTrader 5 (MT5), a platform that has been a favorite of brokers around the world for years. But there are no download links for the platform on the website, and the account registration menu leads to a message that GlobelFX has been suspended by the hosting provider.
But even if GlobelFX had some trading software, that wouldn’t be reason enough to consider it a genuine broker. Financial scammers often use trading platforms to fool their victims that their money is actually being invested.
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.
GLOBELFX TRADING CONDITIONS
The only information about the alleged trading terms that GlobelFX pretends to offer is an incomplete description of three types of trading accounts. While the GlobelFX promises “competitive pricing,” a spread of 3 pips is specified in these descriptions. This level is double the industry norm and is very disadvantageous to the trader.
Leverage for all account types reaches 1:500. This is not a level that you see with regulated brokers. Trading with high leverage allows higher profits, but also increases the risk of sudden and excessive losses proportionally. All leading regulators limit leverage for retail traders. In the UK and EU the maximum permitted level is 1:30 and in the US it is 1:50. This maximum level only applies to trading major currency pairs, with even more limited leverage for more volatile assets.
GlobelFX also claims to offer copy trading, also known as social trading. With legitimate brokers, this is a service that allows less experienced investors to benefit from the insight of seasoned traders. But with websites like GlobelFX, it’s just part of the scam scheme.
The minimum deposit is 100 USD. You should be aware that for the same amount or for less you could open a starter account with a real, licensed broker.
GLOBELFX DEPOSIT/WITHDRAW METHODS AND FEES
GlobelFX claims to offer multiple payment options but does not provide any information on payment methods and transaction fees. Legitimate 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 or Neteller. Scammers prefer cryptocurrencies because these transactions are not subject to refunds.
Since GlobelFX does not provide proper legal documentation, it is unclear what traps the fraudsters may have set. Typically, fake brokers make withdrawing money impossible through huge fees and impossible-to-fulfill traded volume conditions.
HOW DOES THE SCAM WORK
Many people are looking for ways to make money passively, but do not have the necessary knowledge to invest in the financial markets themselves. This makes them a target for the many online scammers posing as brokers. If you come across some of them and give them your contacts, you will be contacted by skilled scam artists who will assure you that they can take on the incomprehensible aspects of investing for you. You will only be required to invest and take profits.
But when you try to collect even just a fraction of your money, it will turn out to be impossible. Your supposed profits will suddenly evaporate, or you’ll find that you have to meet impossible traded volume requirements first. Fraudsters often insert huge withdrawal fees into client agreements amounting to 10%, 20% or even more. You won’t be able to hold scammers accountable because they hide behind fake names and shell-companies offshore. Scammers also typically use non-refundable payment methods.
WHAT TO DO WHEN SCAMMED
First of all, you should be very careful not to fall straight into the clutches of other scammers. Another common scam is to promise money recoveries from fake brokers for an upfront fee.
If you used a credit or debit card for the transactions, you can charge a chargeback. Visa and MasterCard have a long period in which they allow such requests – 540 days. But keep in mind that fraudsters can dispute if you have provided them with a copy of your ID and proof of address. It would also be helpful if you alerted the authorities in your country and other people online to the activities of the scammers.