WikiFX App: Worldwide Solution to Avoid Scam in Forex Industry

Before depositing money for any financial investment, we have to know the company with whom we trust our fund. The goal of financial investment to gain multiple profits from our initial funds could be obstructed indefinitely if we trust the wrong companies, or even worse, scam brokers. This is particularly important to note for layman and beginner forex traders who have to deal with a flood of information about forex brokers -some credible, some doubtful.

The Necessity to Ensure Credibility in Forex Industry

According to the latest report from Great Britains financial watchdog, Financial Conduct Authority (FCA), over £27 million was lost due to scams involving crypto and forex investments during 2008-2019 in the UK alone. On average, victims were each scammed out of £14,600. Forex scam statistics from other countries are scarce, but the numbers are most likely comparable if not higher.

The temptation to “get rich quick” accompanied with lack of consumer knowledge is the reason why forex industry is fraught with fraud. A lot of beginner traders testified their distastes for financial investment stemmed from forex scam cases where each of them lost up to thousands of dollars. Those funds may come from years of savings, inheritance, or even pensions. It is an extremely unfortunate circumstance, but actually not unavoidable.

In fact, forex industry provides legitimate investment and hedging facilities in all parts of the world, from the US, Canada, the UK, Japan, Australia, all the way from America and Europe to Asia and Africa, recognized by law in the countries where legal banking system is properly developed. After all, forex industry is originally rooted in international inter-bank currency transaction network. Forex industry has currently developed its own highly lucrative and speculative investment platform, but it is inseparable from its roots.

A lot of experienced traders in five continents have harvested multiple gains legally throughout the years and become millionaires themselves by making use of this international network. However, there is one caveat: Would-be traders have to first register with legitimately licensed forex brokerage companies. Unless potential trader can differ between licensed and scam broker, any subsequent investment would most probably be futile and end in disappointment.

An Easy-to-use List of Licensed Forex Broker Companies

Most countries have developed legal framework to regulate and observe financial institution operations, including futures brokerage companies that facilitate forex trading for retail customers. There are UK FCA, US CFTC, Japan FSA (JFSA), Australian ASIC, Indonesian Bappebti, and so on. Each establishes their own standardized rules and grant their own membership licenses.

Still, forex regulatory bodies around the world are not coordinated simultaneously under the same book of law. As a result, there is no one whole list that could tell us the name of all licensed brokerage companies in the world. This fact further complicates the path that a would-be forex trader has to take in order to find a credible forex broker.

A forex broker who is already licensed in one country may be declared illegal in another country. It may sound strange when highly credible UK-licensed companies are declared illegal in a certain country with relatively poorer jurisprudence, but that is the only feasible solution for the time being to prevent misidentification. Otherwise, companies located in obscure offshore island may also declare themselves as legal simply because they received licenses from less-credible regulatory body, when their trustworthiness is actually questionable.

There is a lack of means to enforce financial market rules between countries. Any trader who chooses to deal with overseas forex broker has to undertake the risk of being defrauded. Unfortunately, beginner trader is often misled by legal claims from obscure foreign entities. One would expect every countrys watchdog to manage this risk; but admittedly, they have very limited resources. Any country's regulatory body could only check foreign entities' legal status when there are actual queries from their own citizens, or in other words, after some unpleasant incidents happened.

In this circumstance, I find WikiFX app potentially helpful for anyone who are looking to dip their fingers in forex trading. The app properly lists regulatory institutions from various countries and explains clearly whether one forex broker is licensed under highly-credible regulatory body or not. Users who need to find information about legal status and background of a certain brokerage company could simply type in the name of the company on available field to find relevant information.

Huge Mission in a Simple Platform

Dubbing itself as Forex Inquiry Platform, WikiFX offers third-party services for users to learn all necessary information regarding forex brokers. Main license information is provided for free, while other advanced information is provided for a fee. Aside of license status, WikiFX unveils research result about broker risk exposure, trading platform performance check, and many others. WikiFX officials also conduct field survey from time to time to ensure the authenticity of address and official information provided by forex brokers in various countries.

By using the WikiFX App, potential traders can quickly and easily identify licensed brokers and unlicensed brokers. A proper broker would have its license number shown, along with other important information. On the other hand, scam brokers info would appear along with necessary warnings. There is a long list of scam brokers within the app that would prevent layman and beginners from dealing with dubious companies under the guise of forex broker.

In short, WikiFX may significantly reduce the struggle to find a proper forex broker. Of course, the WikiFX App is still far from perfect. Although it has compiled an extensive list of dozens of regulatory institutions and hundreds of forex brokers, it needs to step up effort in ensuring the accuracy and authenticity of information supplied for users. There are real legal risk if the app serves false information for users, even if it is not deliberate. That is indeed a huge task and definitely not an easy one to do. But as time goes by, we can expect the app to increasingly enrich its database of broker information from all over the world.

[Abida Muttaqiena]

BEc has been involved in financial trading and investing since 2011. She has also cooperated with various broker and service providers in forex industry since 2013 to boost knowledge among Indonesian traders through online and offline educational program. Currently, she works as external contributor and consultant for several top forex websites in Indonesia, including seputarforex.com, forexindonesia.org, and analisaforex.com.

References:

Financial Conduct Authority. “Over £27 million reported lost to crypto and forex investment scams”. May 21, 2019.

https://www.fca.org.uk/news/press-releases/over-27-million-reported-lost-crypto-and-forex-investment-scams

Written by Abida Muttaqiena