Beware! Cryptoopttrade 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.
Cryptoopttrade is part of a rather extensive list of nearly identical websites falsely claiming to be regulated forex and CFD brokers. In this review, we will take a detailed look at the signs by which you can recognize this and similar financial scams.
CRYPTOOPTTRADE 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.
Cryptoopttrade is represented as the trade name of the company P24O Ltd. The same company is listed as the owner of fraudulent websites such as Zeta Trade, Crypto Elit Fx, Prime24 Options, Ultimatebitcash, Sprint OptionTrade, Metrictradingfx and Prime24.
The website claims that this company is licensed and regulated by an institution called MFSA and is based in the United States.
In the text of the Terms and Conditions we see the patently false claim that “MFSA” is an abbreviation for “US Financial Services Authority”.
MFSA is in fact an aberration of Malta Financial Services Authority. In the MFSA database, we find numerous warnings about the P24O ltd and related fraudulent websites.
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). There is no P24O Ltd among 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 the 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.
CRYPTOOPTTRADE TRADING SOFTWARE
Cryptoopttrade claims to offer clients the industry’s most popular trading software, MetaTrader 5 (MT5). But the Cryptoopttrade does not provide links to download the software. Account registration does not provide access to MT5 or other trading software. The Cryptoopttrade dashboard lacks any functionality for trading financial instruments.
But even if Cryptoopttrade had 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.
It is advisable to contact one of the many legitimate brokers that offer MT5 or the still very popular MT4. These platforms have established themselves as leaders because they offer a wide range of features, including a wide variety of options for customization, multiple account usage, designing and implementing custom scripts for automated trading and backtesting trade strategies.
CRYPTOOPTTRADE TRADING CONDITIONS
Most legitimate forex and CFD brokers offer different types of trading accounts tailored to clients with different capital and investment intentions. Cryptoopttrade claims to offer a large number of account types, but right away we see something wrong. The accounts are divided into weekly and monthly, which makes no sense from a financial trading perspective and is not something you will see with a true financial services provider.
On the website we also find a claim that Cryptoopttrade offers leverage up to 1:200 for major currency pairs. This in itself is evidence that Cryptoopttrade could not be a licensed broker in the US or a European Union country.
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.
The specified minimum deposit is 500 USD. For a much lower amount you could open a trading account with almost any licensed broker. Many leading brands offer beginner investors Micro accounts with a symbolic minimum deposit.
CRYPTOOPTTRADE DEPOSIT/WITHDRAW METHODS AND FEES
On the homepage of the website we see the logos of popular payment methods such as Neteller, Skrill, credit cards, bank transfer and Bitcoin.
In the deposit menu itself, the choice is between cryptocurrencies, Western Union and MoneyGram. But when trying to use the conventional payment methods, a message pops up that we need to contact an account manager. The only actual option available is to send an amount to the specified crypto wallets.
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.
Cryptoopttrade doesn’t provide information on deposit and withdrawal fees, but that doesn’t mean you won’t be surprised with hidden charges and terms.
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.
