Beware! VZAFX 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.

 

VZAFX  is a very questionable offshore broker that is not subject to regulatory scrutiny and does not provide clear information about the trading conditions it offers. There would be no good justification for choosing this particular website to invest in the financial markets when there are much safer alternatives.

VZAFX REGULATION AND SAFETY OF FUNDS

The first and most important question when choosing a broker is whether the company is based and licensed in a regulated jurisdiction, which provides clients with significant guarantees.

VZAFX provides an incomplete contact address that does not explicitly state jurisdiction. This in itself is a red flag.

The address given is in the Saint Vincent and the Grenadines (SVG)  – an offshore zone. There is indeed a company called VZA FX Limited registered there, but that means absolutely nothing in terms of the security of your funds.

While this country has a financial regulator, unlike other offshore areas, it does not regulate the activities of forex and CFD 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 03 February 2022.

Some large brokerage firms set up offshore subsidiaries, including in SVG. The aim is to be able to compete successfully in unregulated emerging markets in Asia and Africa. But these companies want to maintain a good brand name, which is why they provide guarantees and transparency even for clients of their unregulated divisions. This cannot be said of the VZAFX, which is simply an unregulated company that may or may not offer the services it claims.

If you have decided to invest in financial instruments, and especially if you are a novice trader, you should use the services of a licensed broker based in a jurisdiction with strong regulations.

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.

VZAFX TRADING SOFTWARE

VZAFX offers the MetaTrader 5 (MT5) software, which is actually the most widely used trading platform in the industry currently. Here’s what the platform looks like:

But it should be noted that having solid trading software is no guarantee that the broker is correct, and even that this trade is not fictitious.

You could always use the services of a regulated broker, the vast majority of which offer clients MT5 or the still very popular MT4. This will enable you to use the advanced features of these platforms without fear of being scammed. These platforms are preferred by the majority of brokers around the world because of their powerful automated trading capabilities, including Expert Advisor bots and customised scripts for backtesting trading strategies.

VZAFX TRADING CONDITIONS

The VZAFX website does not provide any details on the trading conditions it offers, except for general promises of “best prices” and no trading fees. This is also very suspicious – licensed brokers not only provide detailed information on all trading parameters, but also offer various account types tailored to the needs of traders with differing investment intentions.

In the trading platform we see a spread of 1.1 pips for the benchmark currency pair EUR/USD. This is indeed a good price for the trader, but you will get the same and often better terms with many licensed brokers.

When registering a new account, a leverage level between 1:500 and 1:1000 can be selected.

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 EU, UK and Australia 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.

VZAFX also promises generous deposit bonuses, but provides no information on the specific terms and conditions associated with these promotions. Regulated brokers are prohibited from offering bonuses, and scammers and shady brokers use bonuses to tie their victims to very unfavorable terms.

The minimum deposit is 30 USD. This is indeed a low amount, but it should not tempt you. Many licensed brokers, including industry leading brands, allow you to start trading with even lower amounts.

VZAFX DEPOSIT/WITHDRAW METHODS AND FEES

Another significant reason to doubt VZAFX is that it does not provide the ability to deposit via standard payment methods. When you request to make a deposit, you only receive a one-time QR code that you have to open with a mobile banking app – with no other details specified.

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, Neteller, Sofort or GiroPay.

The website and limited legal documentation lack information on transaction fees and additional withdrawal terms.

HOW DOES THE SCAM WORK

Many people have a desire to invest in the financial markets but lack the necessary knowledge and experience. This makes them a potential victim of the many internet scammers posing as brokers and investment intermediaries. These types of scams have exploded alongside the cryptocurrency boom.

If you trust such a website and give them your personal information, you will be contacted by experienced scammers who will entice you with promises of easy profits. The scammers usually offer to take over all aspects of investing for you, sometimes even prompting you to install remote access software on your personal computer. After investing an initial low amount, they will convince you that you are already making incredible profits and urge you to invest more.

But you will never get the promised profits, nor will you be able to get your money back. If you want to withdraw funds from your account, you will find that you have suddenly lost everything in the market, or that you have to meet impossibly high traded volume requirements, or that you have to pay huge fees. It is also possible that fraudsters simply disappear because they hide behind fake names and shell companies in offshore areas that are not subject to any control and regulation.

WHAT TO DO WHEN SCAMMED

One of the few options to get at least some of your money back in such a situation is to ask for a chargeback. But this is only possible if you have used a credit or debit card for the transaction. Scammers typically use cryptocurrencies or dubious e-wallets that make it impossible to get your money back.

Under no circumstances should you trust people and websites that promise to magically refund your lost money for an upfront fee. This is also a well established scam. You may even fall victim to the same scammers again.

Top Forex Brokers

BrokerCountryRatingMin. DepositWebsite
US4.99/5$50 Click for a special offerWebsite

Leave a Reply

Your email address will not be published. Required fields are marked *