How to Spot an Unregulated or Scam Forex Broker?

The Most Common Warning Signs of Scam Brokers

1. They guarantee enormous returns with no dangers.

In the same way, traders with a strong desire to make money are very tempted by promises of quick wealth. And it's a dead giveaway that this broker is a sham. Forex trading is a “zero-sum” game in which some profit and others lose. Furthermore, the forex market is not a game of chance, but rather a legitimate industry in which billions of currency units are exchanged every day. Learning how to trade effectively involves time and money.

2. There is no regulation.

A registered forex broker abides by the norms and standards established by its forex regulator, while the actions of an unregulated broker are free of limits and transparency. Funds held by investors in unregulated brokers are not safe and are not protected by any legislation.

3. Clone company

No surprise, clone enterprises emerge as more individuals appreciate the need for regulation. Some brokers may pretend to be licensed businesses but will use the actual firm's regulatory information (e.g., license number or reference number) and address on their website to make it seem legitimate. It might say it has something to do with foreign companies that are on the Register, or it might copy the information of a regulated company, changing only small details like the contact phone number. This gives the uncontrolled company the appearance of being regulated. Top Respect says it is a representative of the FCA Regulatory Body (FCA 163299), which was created in 2016 and gives investors around the world access to hundreds of forex currency pairs, precious metals, European and American indices, international equities, commodities futures, and other trading products.

4. There are no separate accounts.

When doing research on broker websites, you will see that most brokers promise to keep their customers' cash in segregated accounts. Consider it a red signal if they don't. A broker without separate accounts might manipulate how they handle your assets. It allows them to spend the client's money at their leisure and then flee.

5. Untrustworthy trading platforms

We can identify fraud based on the trading platforms they use. Forex brokers on the blacklist are more likely to use little-known or unknown trading platforms rather than renowned ones like MT4/MT5, cTrader, and so on. Some would charge customers a high fee to utilize their trading platforms. That is also unusual. The download links for other scam brokers' trading terminals are broken.

6. Unprofessional behavior

This might encompass a variety of things. Its website has no contact or background information. Contact information is incorrect. Customer service is unresponsive. The client manager just encourages, “You should deposit more now,” or they overstate their profits and actively promote their PAMM accounts.

7. Only Bitcoin and cryptocurrency deposits are accepted.

People also discover that many fraudulent brokers have restricted financing choices. Some may accept credit/debit cards and bank wire transfers, but only BTC or other cryptocurrencies are accepted.

8. Fraudulent withdrawal

Problems with withdrawal are a huge red flag. You should be able to effortlessly withdraw your gains. You should be aware of the withdrawal costs, regulations, and processing timeframes. If not, the brokers are undoubtedly less trustworthy. There are several reasons for a broker to keep your money. It either lacks the cash to pay you, is attempting to make more deals with your money, or is stealing it. Worse, it is a complete sham that does not wish to refund your money in the first place. None of these situations is favorable.

9. There has been a lot of nasty reaction online.

Some brokers have elaborate websites. There may be no loopholes. That online commentary, though, is grounds for alarm. They are referentially important since they are based on traders' actual experience.

Most investors have difficulty retrieving funds from fraudulent or unlicensed forex firms.

Using the WikiFX App, how can you identify scam brokers or unregulated brokers？

WikiFX is a forex trading search engine site that offers in-depth information on brokers. It lists more than 40,000 brokers, both legal and unregistered.

To determine the status of the broker on the WikiFX App, WikiFX simply categorized each broker as regulated or unregulated. All you have to do is search for the broker's name, and the results will show after you click enter. You should be able to see if the broker is licensed or unregulated in the results. To observe the difference, look at the picture below.

Regulated Broker

Unregulated Broker

If you are already in a difficult position, contact WikiFX Support for assistance in settling your trading disputes with your broker.

Conclusion

The FX market is enormous. Every day, trillions of dollars flow. Since the early 2000s, when the forex market became available to everyone, scammers have mixed in with reputable brokers. Despite the fact that globalization and information technology make it possible to verify internet forex brokerage information in a matter of minutes, old scams persist and new ones emerge. Remember to never believe anything that seems to be too good to be true.

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