Beware! CryptWise 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.
With all the excitement surrounding cryptocurrencies, it was inevitable that many online scammers would emerge, taking advantage of people’s ignorance and inexperience regarding these financial instruments. CryptWise is a rather trivial example of this type of fraud, and not a very sophisticated one at that. Let’s take a look at what are the clues by which you can easily identify such financial fraudsters.
CRYPTWISE REGULATION AND SAFETY OF FUNDS
The first red flag is that the homepage of the web site does not provide you with any information about who is behind CryptWise. There isn’t even an address, and the only way to contact them is by email. 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.
The website does have Terms and Conditions and a Client Agreement. There it is stated that the owning company is Dreammkt Ltd, based in Saint Vincent and the Grenadines (SVG).
It is noteworthy that the name of the company and the jurisdiction are embedded in the text as an image. The only reason to do this is if you don’t want this information to be detected by internet search engines. It states that corporate information about the company can be found on the website, but this is not true. Therefore, we have doubts that this company is the real owner of CryptWise.
But even if the information in the documents is correct, this does not provide any guarantees for your funds. Because of the lack of regulatory norms and oversight, SVG is one of the favorite bases of operations for shady brokers. While this country has a financial regulator, unlike other offshore areas, it does not license brokers nor it regulates companies that engage in such activities. Тhe local Financial Services Authority warns of this as soon as its website opens:
Especially if you are new to trading, you should not take risks by investing through offshore companies. 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.
CRYPTWISE TRADING SOFTWARE
On the CryptWise website we see general promises of “technologically advanced software” without providing any details. At the time of writing this review, it was not possible to register a new account with CryptWise. This could be the result of a technical issue, or the scammers’ desire to only handle people they have attracted themselves through social media.
Genuine brokers give clear information on exactly what trading software they offer. 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.
CRYPTWISE TRADING CONDITIONS
CryptWise is even more vague about the terms of trade it claims to offer. There are descriptions of three types of trading accounts on the website, but they do not give specific parameters. These accounts are tied to absurdly high investments – 100,000 USD, 250,00,000 USD and 500,000 USD. In comparison, many leading brands in the industry allow you to start trading with amounts of 50-100 USD, and sometimes even less.
CRYPTWISE DEPOSIT/WITHDRAW METHODS AND FEES
Due to the inability to register an account, we have not been able to confirm what payment methods are accepted by CryptWise. The legal documentation mentions credit cards, bank transfer and cryptocurrencies. Experience with scammers shows that in all likelihood only the latter is true.
Scammers prefer cryptocurrencies because these transactions are not subject to refunds. 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, Skrill, or Neteller. If you are interested in licensed brokers that also accept cryptocurrencies as a means of payment, take a look at this list.
The minimum withdrawal amount is between 100 USD and 250 USD depending on the payment method. CryptWise does not provide information on transaction fees, but we would not be surprised if there are hidden ones.
The only fee specified is that for inactivity. If the account has not traded for 60 days it will be deactivated and charged 200 USD. Reactivation requires a fee of 100 USD.
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.