Beware! CryptoChainGroup 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.
CryptoChainGroup, or Crypto Chain Group, is what we could call a classic example of online fraud. This anonymous website posing as a forex broker uses tricks that we have seen literally hundreds of times. It goes without saying, but you shouldn’t trust your money to CryptoChainGroup. Instead, this website can serve as a lesson in how to recognize such scams.
CRYPTOCHAINGROUP REGULATION AND SAFETY OF FUNDS
The most important information about a financial services provider is its regulatory status. Licensed brokers provide detailed information about which company runs them, where it is based, which jurisdictions it is authorised in and which regulatory bodies oversee its activities.
CryptoChainGroup is completely anonymous – nowhere is the name of the company that owns and operates this alleged broker mentioned. This is a sure sign that we are dealing with scammers.
Even the Terms and Conditions and the rest of the legal documentation do not mention a legal entity, which renders these documents without legal value. The documents in question have been used by a long list of scammers we’ve reviewed – for example Lifetimeinvestments.co, Globexbull, Onecapital Invest and SmartCapital.Fund.
The reason for the popularity of these fake documents among fraudsters is that these texts are full of traps to the detriment of their potential victims.
“Estonia and the Grenadines” are specified as relevant jurisdictions in the Terms and Conditions. Such anonymous websites are not allowed to provide financial services in a European Union country where strict regulations apply.
Grenadines should be understood to mean Saint Vincent and the Grenadines (SVG). This is an offshore zone that has no licensing and regulatory regime for forex brokers. This makes this island country a preferred base for financial fraudsters who only pretend to offer such services.
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.
CRYPTOCHAINGROUP TRADING SOFTWARE
Like many other fake brokers, CryptoChainGroup uses a basic and cheap-looking web trading platform.
While the platform has the basic features for placing orders, customising 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.
It should be noted that the presence of some kind of trading software is no guarantee that this is a genuine broker. Financial scammers often use trading platforms to fool their victims that their money is actually being invested. However, this trading is entirely fictitious and the money goes directly into the scammers’ pockets.
CRYPTOCHAINGROUP TRADING CONDITIONS
CryptoChainGroup claims to offer different types of trading accounts, similar to real brokers. But as pointed out, you have absolutely no guarantee that this trading is real – and it certainly isn’t.
Leverage is said to vary from 1:100 to 1:1000 for different account types. This is further circumstantial evidence that CryptoChainGroup could not be a licensed broker in a regulated jurisdiction such as Estonia. Regulated brokers do not offer such levels to retail traders as trading with high leverage carries risks of sudden and excessive losses. A maximum leverage of 1:30 is allowed in the European Union and the United Kingdom and 1:50 in the United States.
CryptoChainGroup also allegedly offered bonuses to customers, a practice that is prohibited for regulated brokers.
The stated minimum deposit is 250 USD. For a significantly lower amount you could open a starter account with many licensed brokers, including some of the industry’s leading brands.
CRYPTOCHAINGROUP DEPOSIT/WITHDRAW METHODS AND FEES
CryptoChainGroup claims to allow deposits and withdrawals by wire transfer and credit cards. We were unable to confirm this because access to the deposit menu requires identity verification.
Fraudsters usually steer their potential victims towards cryptocurrency transactions because they do not allow refunds to be requested. While there are some legitimate brokers that accept digital currencies like Bitcoin, they do so alongside other transparent payment methods such as credit/debit card, bank transfer or popular e-wallets like Sofort, Neteller or POLi.
In the Terms and Conditions we find clauses that almost guarantee that it will not be possible to withdraw the money you made the mistake of depositing in CryptoChainGroup. Firstly, if an account has received a bonus, it can only withdraw profits once it reaches a minimum traded volume of 30 times the bonus plus deposit.
And even more worrying, CryptoChainGroup charges a whopping 10% levy on accounts that withdraw funds before they reach “200 in turnover”. It doesn’t specify 200 what – presumably they mean 200 lots, i.e. 20,000,000 currency units. Such vague and extortionate clauses are typical of fake brokers.
If you are allowed to withdraw any money at all, the fees for doing so are substantial and as high as 50 USD. There is also a monthly fee of 10% of the balance if the account has been inactive for more than three months.
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.
