Xxlmarkets review – 5 things you should know about xxlmarkets.com

Xxlmarkets review – 5 things you should know about xxlmarkets.com

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

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Xxlmarkets’ cumbersome website and generic name do not inspire us with confidence that this is indeed the trustworthy forex and CFD broker it claims to be. Fact checking leaves no doubt that this is in fact a scam. It would be a serious mistake to trust Xxlmarkets instead of some duly licensed and established broker.

XXLMARKETS REGULATION AND SAFETY OF FUNDS

The homepage does not provide any information on which company is behind Xxlmarkets and where it is based. That in itself is a big enough red flag. Legitimate brokers provide clear information about their legal and regulatory status.

Licensed financial services providers are also required to provide a comprehensive set of legal documentation. When registering a new account with Xxlmarkets, you are required to indicate your agreement to the Terms and Conditions. But the link to the document is blank.

On the website we find another document, Client Agreement. Immediately noticeable is that the whole text is embedded in the website as an image. This prevents the content from being indexed by search engines.

This Client Agreement specifies that the company behind Xxlmarkets is called Capital Invest Limited and the governing law is that of Vanuatu. This is an offshore jurisdiction without any significant regulations for brokers.

But a check of the Vanuatu Financial Services Commission database shows that the only company with a similar name was dissolved way back in 1993. So the information on the Xxlmarkets website is a lie and we don’t know who is really behind it.

You should only trust legitimate brokers operating in one of the established financial centres like the UK, EU, USA or Australia. There, the activities of brokers are controlled by powerful regulatory bodies such as UK’s Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), Commodity Futures Trading Commission (CFTC) in US or Australian Securities and Exchanges Commission (ASIC). 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.

XXLMARKETS TRADING SOFTWARE

Although it is obviously a fake broker, Xxlmarkets does have trading software – MetaTrader 4 (MT4). But the platform is not registered under the name of Xxlmarkets, but of TechInvest Solutions Ltd.

However, the credentials provided by Xxlmarkets can be used to log into the TechInvest server. The same company, based in the Marshall Islands, also provides the software to other scammers we have reviewed, for example Stocks24 and Crypto800.

The presence of a trading platform does not make Xxlmarkets any more legitimate. There are more than enough licensed brokers offering clients the MT4 experience and/or the newer version of the software 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.

XXLMARKETS TRADING CONDITIONS

The Xxlmarkets website describes three types of trading accounts, and the terms listed are not at all competitive.  For example, the minimum deposit is 500 USD, whereas for ten times less you could open a starter account with many leading brands in the industry.

Xxlmarkets offers spreads starting at 2.3 pips. That’s about double the price you’ll pay at most legitimate brokers. In the MT4 platform we see even higher spread of 3 pips.

There is no information on the website about another important parameter of trading, leverage. The MT4 platform has a 1:200 leverage level, which is not allowed at regulated brokers.

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 EU and UK regulators limit leverage to 1:30 for trading in major currency pairs and even lower levels for more volatile assets. The same rules currently apply to Australia. In the US, the maximum limit is slightly higher at 1:50.

XXLMARKETS DEPOSIT/WITHDRAW METHODS AND FEES

As is the case with most scams of this type, Xxlmarkets promises popular payment methods such as Visa, MasterCard, WebMoney and Skrill, but the choices in the deposit menu itself are different.

There we see cryptocurrencies, wire transfer and a not very well known provider called VirtualPay. Legitimate brokers typically offer clients a wide choice of transparent payment methods, including established e-wallets such as PayPal, Neteller or Sofort.

Xxlmarkets does not provide clear information on deposit and withdrawal fees and terms. The only fee specified in the Customer Agreement is that for an inactive account – 60 USD per month.

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.

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