Beware! Cryptorichs 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.
Cryptorichs is one of the many websites that promise to provide you with an easy path to realizing profits by trading on the financial markets. But a significant portion of these websites are a scam – this is also the case with the Cryptorichs. This is not the innovative forex and CFD broker it claims to be, but a fairly typical scam scheme targeting inexperienced people. It is in your best interest to stay away from Cryptorichs.
CRYPTORICHS REGULATION AND SAFETY OF FUNDS
From the first glance you can see the main problem with Cryptorichs – its total anonymity. The website does not provide the name of the company that owns and operates this supposed broker, there is not even an address listed. The Terms and Conditions also don’t mention the name of a legal entity, nor do they specify which laws and jurisdiction apply.
When you visit the website of a legitimate broker you can expect to find clear and detailed information about the company that owns and operates it, where it is based and what regulatory regimes it is subject to.
It’s really not justified to take chances with anonymous websites when there are plenty of legitimate, regulated brokers.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.
CRYPTORICHS TRADING SOFTWARE
Cryptorichs promises “award-winning investment platform”, but does not deliver. After registering an account, we get access to a fairly simplistic web-based trading platform. Here is how it looks like:
While the platform has the basic features for placing orders, customizing charts and application of technical indicators, it lacks the more advanced functionality found in the most widely used trading platforms in the industry, 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.
We also see an option to “trade with MT4” on the Cryptorichs dashboard, but the link leads to a questionable installation file that is definitely not MT4. We recommend that you do not install suspicious software from anonymous websites because there is a good chance that it is malware.
The presence of a trading platform does not make this website any more legitimate and does not guarantee that this alleged broker offers real trading. Many scammers have trading software to fool their victims that their money is being invested.
CRYPTORICHS TRADING CONDITIONS
Cryptorichs claims to offer seven different trading accounts. The description on the homepage of the website lists a minimum deposit of 1,000 USD. However, the deposit menu itself allows for a minimum transaction of 100 Cryptorichs. This is a more reasonable amount, but in any case it would be safer and prudent to use the services of a licensed broker. Many leading brokers in the industry allow you to start trading with amounts even lower than 100 USD.
The leverage offered reaches 1:500 for currencies, 1:100 for commodities and 1:50 for indices. Regulated brokers do not offer such levels to retail traders as trading with high leverage carries risks of sudden and excessive losses. 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 and ASIC. In the USA and Canada the maximum leverage is slightly higher, 1:50.
Cryptorichs does not provide any information on other key parameters such as spreads and commissions. In the trading platform we see a very low spread of 0.3 pips, but this does not mean much given that the trade offered by Cryptorichs is in all likelihood fictitious.
CRYPTORICHS DEPOSIT/WITHDRAW METHODS AND FEES
Credit/debit card is the only method of deposit at Cryptorichs. Legitimate brokers typically offer clients a wide choice of transparent payment methods, including bank transfer, credit/debit cards and established e-wallets such as Sofort, GiroPay or QIWI.
Cryptorichs does not specify whether it charges transaction fees, but hidden fees and conditions can always be expected from scammers of this type. In the Terms and Conditions we find a clause typical of fake brokers. If the account has received a bonus, it can withdraw only after meeting exceptionally high requirements for minimum traded volume – 40 times the amount of the bonus plus the deposit. Such predatory conditions are one of the reasons why regulated brokers are prohibited from using bonuses to attract clients.
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.