Beware! Skyfxtrader 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.
There is only one claim on the Skyfxtrader website – that it is totally different from other forex brokers. This is undoubtedly true, because Skyfxtrader is not a real forex broker, but a scam. It’s also a low-effort scam that can be easily exposed. Let’s look at exactly how.
SKYFXTRADER REGULATION AND SAFETY OF FUNDS
If a financial services provider is legitimate, you will find on its website clear and detailed information about the company that owns and operates it, where it is based, and what licences it has. Genuine brokers also provide access to a comprehensive set of legal documentation. The availability of such information does not guarantee that it is not false or misleading. But the absence of these elements is very indicative that in all likelihood you are dealing with scammers.
Skyfxtrader is a completely anonymous website. A single email is provided – no company name, address or phone number is mentioned anywhere.
Skyfxtraderdoes not provide access to Terms and Conditions, Customer Agreement or any other document.
We do not know who we are dealing with, nor what terms we are agreeing to when we register for an account. Under such circumstances it would be very unwise to put our money on the line.
Before investing your money in financial instruments, it is imperative to make sure you do so through a licensed intermediary and not one of the many scammers lurking online.
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.
SKYFXTRADER TRADING SOFTWARE
The Skyfxtrader website also lacks information on the most important tool for forex and CFD trading – the software. After registering an account, we get access to what could only be described as an imitation trading platform. This imitation consists of a non-functional buy and sell menu, and of charts with current asset prices taken for free from the data provider TradingView.
But even if Skyfxtrader had a more convincing platform, that would not make this website credible. Fake brokers use trading software to mislead their victims that their money is really being invested. But this trade is entirely sham.
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.
SKYFXTRADER TRADING CONDITIONS
Legitimate forex brokers offer a variety of trading account types tailored to the needs of clients with different capital and investment intentions. These brokers also provide clear and detailed information on trading parameters – leverage, spread, commissions, order execution method, etc.
Instead, on the Skyfxtrader website we see a list of “investment plans” promising guaranteed and high returns. A genuine broker will not and cannot promise you guaranteed profits. In fact, licensed companies are obliged by regulators to warn their clients about the high risk of losses when trading financial instruments.
The minimum amount for these plans is 200 USD. However, the FIQ section specifies a different minimum of 500 USD. Such discrepancies are typical of fraudulent schemes. Real brokers usually allow you to start trading with a much lower minimum deposit, sometimes as low as 1 or 5 USD.
According to a table on the homepage of the website, Skyfxtrader offers extremely high leverage, reaching 1:1000. 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.
SKYFXTRADER DEPOSIT/WITHDRAW METHODS AND FEES
Skyfxtrader allows deposits and withdrawals only through cryptocurrencies.
This is also a clear sign that we are dealing with fraud. Scammers prefer cryptocurrencies because these transactions are not subject to refunds. 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 Skrill, PayPal, Neteller or GiroPay.
The lack of a publicly available Terms and Conditions or Client Agreement means that scammers may have set many traps such as hidden fees and impossible-to-meet withdrawal terms.
HOW DOES THE SCAM WORK
There are many scammers lurking on the internet, luring people with promises of easy riches. These scammers arouse the curiosity of their potential victims through online ads, videos, comments and other content on social networks. Often the initial hook is get-rich-quick tips that link to websites and mobile apps of fake brokers or fake investment firms. After clicking on the ad or downloading the mobile app and having given their contact details, the victims are usually swiftly called by fraudsters presenting a concrete “investment proposal”.
These scammers are very aggressive and often even try to persuade the victims to allow them to take control of their computer remotely in order to make certain money transfers. The fraudsters also try to convince the victims to invest increasingly higher amounts of money. They also make promises of repayment in exchange for one last money transfer. This is a technique to collect even more money from their victims. When you try to withdraw your money, your request is blocked by hidden conditions and huge fees. Fraudsters can also simply disappear because they hide behind fake names and offshore companies.
WHAT TO DO WHEN SCAMMED
First of all, it is important that you do not try to recover your money by trusting people who claim to offer such a service for an upfront fee. These are also 100% scammers. If you used a credit or debit card for the transactions to the scammers, you could ask for a chargeback. But such a claim could be disputed if you provided the scammers with a copy of an ID or proof of address. Scammers usually get their victims to use cryptocurrencies that don’t allow refunds. In any case, it is advisable to inform the relevant financial authorities in your country and spread the word online to warn others not to fall into the same trap.