Your Broker is a Scam if:
- They use words like “Safe & Secure” but do not have a valid license.
- After you deposit $250, they pressure you to invest $5,000.
- A broker calls you offering a “Managed Account” with steady returns.
- They tell you that Crypto doesn’t need a license.
- They ask you to deposit more money (a profit tax), so that you can withdraw.
Which Government Agency Licenses Your Broker?
Each country has its own Financial Regulator that is responsible for regulating Stock Brokers, Forex Dealers, CFD & Bitcoin Trading, and Commodity Exchanges.
Some countries like those who are members of the European Union, accept brokers who are registered with one countries regulatory agency. For example, the arrangement EU countries have with CySEC, the regulator of binary option brokers in Cyprus.
Scam Brokers may advertise that they are regulated by a specific countries regulatory agency, but it is the responsibility of the trader / investor to double check that;
- The broker is actually registered with the regulator.
- The brokers license is still valid.
Australia – Australian Securities and Investments Commission – https://asic.gov.au/
Belize – International Financial Services Commission – http://www.ifsc.gov.bz/
Canada – Investment Industry Regulatory Organization of Canada (IIROC) – http://www.iiroc.ca/
Cyprus – Cyprus Securities and Exchange Commission – https://www.cysec.gov.cy/
Czech Republic – Czech National Bank (CNB) – http://www.cnb.cz/en/
Denmark – Finanstilsynet (The Danish FSA) – https://www.finanstilsynet.dk/
Estonia – MTR Majandus – https://mtr.mkm.ee/
France – Banque de France (BDF) – https://acpr.banque-france.fr/en
Germany – Bundesanstalt fur Finanzdienstleistungsaufsicht (BaFin) – https://www.bafin.de/EN/
Hong Kong – Hong Kong Securities and Futures Commission – https://www.sfc.hk/
Hungary – Pénzügyi Szervezetek Állami Felügyelete (PSZÁF) – http://www.mnb.hu/
Italy – Commissione Nazionale per le Società e la Borsa (CONSOB) – http://www.consob.it/
Israel – Israel Securities Authority – http://www.isa.gov.il/
Japan – Financial Services Agency – http://www.fsa.go.jp/en/
Mexico – Comisión Nacional Bancaria y de Valores – http://www.gob.mx/cnbv
Malaysia – Securities Commission of Malaysia – http://www.sc.com.my
Netherlands – Netherlands Authority for the Financial Markets (AFM) – http://www.afm.nl/
New Zealand – Financial Markets Authority – https://fma.govt.nz/
Russia – Financial Market Relations Regulation Center (FMRCC) – http://fmrrc.ru/en
Singapore – Monetary Authority of Singapore – http://www.mas.gov.sg/
Spain – Comisión Nacional del Mercado de Valores (CNMV) – http://www.cnmv.es/
Slovakia – National Bank of Slovakia (NBS) – http://www.nbs.sk/
South Africa – Financial Services Board (FSB) – http://www.fsb.co.za/
Sweden – Finansinspektionen (FI) – http://www.fi.se/
Switzerland – Eidgenössische Finanzmarktaufsicht FINMA – https://www.finma.ch/
United Kingdom – Financial Conduct Authority (FCA) – https://register.fca.org.uk/
United States – U.S. Commodity Futures Trading Commission – https://www.cftc.gov/
Vanuatu – Vanuatu Financial Services Commission – https://www.vfsc.vu/
How to Prevent Becoming a Scam Victim
The first step to avoid an investing scam, is properly researching your online broker. Ask yourself these questions.
- Does broker have a valid license? . (FCA United Kingdom, FSB South Africa or Australia ASIC.)
- Is the broker (salesman) always calling, and pushing me to deposit money?
- Does the brokers license provide people where I live any protection?
- Can I easily withdraw my money?
The second thing is to watch out for is fake Trading Systems.
- Never use an automated trading software, before you can test out its functions.
- Do not believe any testimonials, because they are all fake and usually illegal.
- If a software or person opened your account for you, they can access to your account.
- Most Important! Historical results are never an indicator of future profits.
Forex scams are one of the oldest scams in the history of the world, and the internet has only helped the scammers. With the growing popularity of Ethereum and Bitcoin, there has been a surge in complaints about rogue Forex brokers.
Make sure to properly do your research, and don’t be naive and think you can make $500 a day, by doing nothing. For every Forex broker you find, and every trading system you hear about, there are fifty more which offer the identical product.
When choosing a CFD or Forex broker, make sure you are using one that is locally licensed and regulated,