Beware! RaiseFX 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.
RaiseFX is an offshore broker that offers favourable terms but is not subject to serious regulatory oversight. We could only recommend this financial services provider to seasoned investors who are willing to take the significant risks associated with trading without regulatory protection. Let’s take a look at what exactly RaiseFX offers.
RAISEFX 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.
RaiseFX is owned by RaiseGroup LLP, a company based in Kazakhstan.
The owner of this company is David Bottin, former Managing Director at AvaTrade.
Perhaps that’s why we see a statement on the homepage of RaiseFX that the broker offers “25 years of experience.” But this is misleading – the broker itself is brand new. And more importantly, for all intents and purposes, RaiseFX is an offshore broker. Regulations in Kazakhstan do not include strict oversight and guarantees of transparency and security for client funds, similar to financial centres in the European Union and the United Kingdom.
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.
RAISEFX TRADING SOFTWARE
RaiseFX uses MetaTrader 4 (MT4), which for years was the most popular trading platform in the industry before being supplanted by 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.
Here’s what the RaiseFX trading software looks like:
However, RaiseFX does not offer add-ons and extensions for the software, nor Virtual Private Servers that allow automated trading to be independent of the trader’s personal hardware.
RAISEFX TRADING CONDITIONS
Most licensed forex brokers offer a variety of trading account types tailored to the needs of clients with different capital and investment intentions.
RaiseFX offers only one account type, and the base currency can be USD, EUR or GBP. This account allows trading in over 400 financial instruments from all major asset classes, including cryptocurrencies.
The trader pays a minimum spread of 0.0-0.2, but in addition there is a fixed commission of 5 EUR, 6 USD or equivalent in other currencies per round lot.
The maximum leverage is quite high – 1:400 for currency pairs and 1:33 for cryptocurrencies.
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. For crypto derivatives trading the maximum allowed leverage in the EU is just 1:2.
RaiseFX requires a minimum deposit of EUR 200/USD/GBP. For that amount you could open a starter account with almost any licensed broker. Many leading brands offer Micro and Cent accounts to beginner investors with a very low deposit, sometimes as low as 5 USD.
RAISEFX DEPOSIT/WITHDRAW METHODS AND FEES
The payment methods offered by RaiseFX are limited – credit/debit cards, wire transfer and cryptocurrencies. You should note that cryptocurrency transactions and wire transfers do not allow you to request a refund or chargeback.
Most licensed competitors of the RaiseFX allow deposit through popular e-wallets such as PayPal, Skrill, Neteller, Sofort or GiroPay.
RaiseFX states that it does not charge deposit or withdrawal fees. According to the Terms and Conditions, the minimum withdrawal amount is EUR 10.
Please note that RaiseFX charges extremely high fees for inactive accounts. Every three months such accounts are charged 100 USD/GBP or EBR, and in addition there is an administrative fee of 100 USD after one year of inactivity.
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.
