Beware! Bittradehouse 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.
On the internet you may come across numerous websites that claim to represent a leading forex broker. For a small portion of these websites this is true, but in most cases chances are you are dealing with scammers. Bittradehouse is just such a case – a poorly disguised financial scam targeting people who are looking for passive income but lack experience and knowledge about the financial markets.
BITTRADEHOUSE REGULATION AND SAFETY OF FUNDS
The Bittradehouse website is primarily available in German, which suggests that it is aimed at German speakers. However, Bittradehouse is not licensed to operate in any German-speaking country.
In fact, Bittradehouse is completely anonymous, which rules it out as a legitimate financial services provider. Even the text of the Terms and Conditions does not mention the name of the legal entity behind this alleged forex and CFD broker.
Legitimate forex brokers provide clear and detailed information about the legal entity that owns and operates them, where it is based, what licences it has and which regulators oversee its activities. Lack of such details or improper presentation of them are always a red flag that we are probably dealing with a scam.
The Terms and Conditions state that the unnamed owner company is based in Saint Vincent and the Grenadines (SVG). Even if this is true, registration in this offshore zone means nothing in terms of consumer guarantees.
As soon as you open the website of the local Financial Services Authority you see a warning that the institution does not licence forex and other types of brokers and does not supervise the activities of International Business Companies engaged in such activities. Because of the lack of regulatory norms and oversight, SVG is one of the favourite bases of operations for shady brokers.
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 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.
BITTRADEHOUSE TRADING SOFTWARE
The Bittradehouse website does not provide clear information about the most important tool for forex trading – the software. Our attempts to register a new account with Bittradehouse were unsuccessful, so we were unable to confirm whether Bittradehouse has a trading platform at all.
But even if Bittradehouse had such a 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.
Legitimate brokers offer clients a wide selection of trading software, including desktop, mobile apps and web-based platforms. 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.
BITTRADEHOUSE TRADING CONDITIONS
When you visit the website of a legitimate broker you will find proposals for different types of trading accounts suitable for investors with different preferences, as well as detailed descriptions of trading parameters – minimum deposit, order execution method, tradable financial instruments, leverage, spread, swap, commissions, etc.
On the Bittradehouse website, we see a description of three types of trading accounts, but they do not contain any specific information about the trading conditions. Only leverage of 1:50 is specified.
High leverage creates the opportunity for more significant profit, but correspondingly increases the risk of sudden and excessive losses. In the United Kingdom and the European Union, the maximum leverage allowed is 1:30.
The text of the Terms and Conditions states that Bittradehouse charges an upfront commission of 20% of each deposit. This is an obvious scam clause. Genuine brokers do not charge such fees.
It would be wiser, safer and cheaper to open a beginner account with a legitimate broker. Many of them allow you to start trading with amounts of 100, 50 USD or even less.
BITTRADEHOUSE DEPOSIT/WITHDRAW METHODS AND FEES
We have not been able to verify what payment methods the Bittradehouse uses. Experience with this type of fake brokers shows that they usually direct their potential victims to cryptocurrency transactions. The reason for this is that cryptocurrencies do not allow the defrauded to ask for a refund.
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 or Sofort.
In the text of the Terms and Conditions we see some very typical fraudulent pitfalls. Non-deposited funds, including trading profits, are not considered client money and cannot be withdrawn in default. If an account has received a bonus, it can only withdraw funds after meeting high minimum trade volume requirements – 30 times the deposit amount plus the bonus.
Regulated brokers are prohibited from offering bonuses, promotions and prize games.
HOW DOES THE SCAM WORK
With all the buzz surrounding cryptocurrencies and NFTs, many people are starting to consider investing in the financial markets as a bid to improve their fortunes. Scammers on the internet have taken notice of that and take advantage of the ignorance of the general public by creating countless websites posing as brokers. These websites offer no real brokerage services and only deceive people into believing that their money is really being invested.
If you come across such a scam website and give out your contacts, you will be contacted by experienced scammers who will convince you that they can take on all the frighteningly complex aspects of investing for you. But you will never get any real profits, nor will you be able to get back the money you deposited. The terms and conditions of these websites are riddled with clauses that make withdrawing funds from your account unfeasible – for example, extremely high minimum trading volume requirements or hefty fees of 10%, 20% or even more of the amount.
Scammers hide behind fake addresses and names and operate through offshore companies that are not subject to regulation and scrutiny. So even if all the withdrawal requirements are met, they may simply disappear and move on to their next fraudulent scheme.
WHAT TO DO WHEN SCAMMED
It is very important not to rush into trusting people on the internet who offer to magically refund your money for a fee. These are also scammers, and they may even be the same ones who scammed you in the first place.
If you have made the transfers using credit or debit card, you can claim a chargeback. Visa and MasterCard allow this to be done within 540 days. However, such a request may not be approved if you have given the fraudsters documents such as a copy of an ID and proof of address. This will allow them to claim that the transaction is legitimate and approved by both parties.
