Beware! Altcoins-bank is an offshore broker! Your investment may be at risk.
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Although cryptocurrencies have recently lost some of their appeal due to falling prices, the online space is still full of crypto scams. Altcoins-bank is a typical case of a fraudulent scheme posing as a cryptocurrency broker. Altcoins-bank is actually part of a whole series of identical scam websites that we have reviewed. Bilitex, Coinsbitx and Yamexbit are just some of the most recent examples. Let’s take a detailed look at why it’s in your best interest to stay away from Altcoins-bank.
ALTCOINS-BANK 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.
No company name is listed on the home page of this website. The User Agreement lists the name Altcoins-bank.com Finance LLP, which is obviously a fake because legal entity names cannot include internet domains.
Altcoins-bank claims to be based in the United States and to operate under local law. To operate as a forex broker in the United States, a company must be registered as a futures commission merchant and foreign exchange dealer with the Commodity Futures Trading Commission (CFTC) and to be a member of the National Futures Association (NFA). But the companies mentioned in the legal documents are not among the NFA members.
If you intend to invest in financial instruments, you should beware of the many fake brokers lurking online. Always check carefully whether the broker you choose really has the necessary licences. There are numerous benefits to working with a company that is truly authorised and supervised by a regulatory institution such as the 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.
ALTCOINS-BANK TRADING SOFTWARE
Like the identical scams, Altcoins-bank uses a very cheap looking and unconvincing web platform that lacks any advanced features. For the scammers, the software is only a means to fool people without the necessary experience that their money is really being invested.
If you use the services of a licensed broker, you will get the opportunity to use established software with advanced features and versions for all types of devices and operating systems. The most widely used trading 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.
ALTCOINS-BANK TRADING CONDITIONS
Altcoins-bank does not offer different account types that you will find with most legitimate financial service providers. However, the terms of trade listed on the website are useful in that they provide us with further evidence of the fraudulent nature of Altcoins-bank.
The most obvious clue is the claim that Altcoins-bank offers leverage of 1:100 when trading cryptocurrencies. Regulated brokers cannot offer such high leverage to retail traders even when trading in low volatility assets such as major currency pairs. The reason is that trading with high leverage increases the risk of sudden and excessive losses. In the US, the maximum leverage allowed when trading cryptocurrencies is 1:5. In other regulated markets such as the EU and Australia, the limit is even tighter, up to 1:2.
Altcoins-bank also claims to offer deposit bonuses and referral bonuses. These are practices prohibited to regulated brokers.
The only other information regarding the terms of the alleged trade is that Altcoins-bank charges Maker and Taker fees of up to 0.20%.
Altcoins-bank does not specify a minimum deposit amount. In any case, it would be wiser to trade through a licensed broker. Many leading brands in the industry allow you to set up a starter account with a very low minimum deposit, sometimes as low as 5 USD or even 1 USD.
ALTCOINS-BANK DEPOSIT/WITHDRAW METHODS AND FEES
As one would expect from a scam focused on cryptocurrencies, this is the only payment method available on the deposit menu.
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 Skrill, Neteller or Sofort. If you’re interested in legitimate brokers that accept digital currency payments alongside conventional methods, check out this list.
The User Agreement outlines numerous fees charged by Altcoins-bank – from 1% to 2.5% of each deposit, an additional 3.5% for “tax payments” and a 2.5% “insurance premium.” Legitimate brokers do not charge such fees. These outrageously high fees are an obvious scam trap.
HOW DOES THE SCAM WORK
While browsing the interwebs there is a significant chance you will come across comments, videos, social media pages that promise easy ways to passively make money. If you follow the links you will be taken to websites claiming to be legitimate brokers or investment firms. And if you take the next step and make contact with the people behind these websites, you will be contacted by slick and experienced scammers who will lure you in with promises of easy profits. For a while they will convince you that your investment is generating impressive returns and you need to pour in even more money to make sure you don’t miss out on this once in a lifetime opportunity.
However, the attitude towards you will be changed if you want to withdraw your money. Suddenly, it will turn out that your investment makes losses and you even owe money to the fake broker for unexpected fees and expenses. They will show you clauses hidden in the Terms and Conditions, according to which you can only withdraw money after you have traded an impossible minimum volume, or that you will have to pay withdrawal fees of 20%, 30% or even more. When you try to hold them accountable you will find they are using fake names and shell companies in shady offshore jurisdictions without any regulatory oversight.
WHAT TO DO WHEN SCAMMED
Your options to recover your money are limited. If credit/debit cards were used for the transactions, you have the possibility to request a chargeback. But most scammers insist that you send them proof of identity and address with which they can dispute that the transactions were legitimate. Fraudsters also predominantly use cryptocurrencies, where refunds are impossible.
You should also be aware that there are many scammers who offer to recover your money for an upfront fee. You should not trust such offers. It is better to contact the relevant authorities in your country and warn them about the activities of the scammers.