In the article below we will discuss 10 different scam and fake forex brokers that every Nigerian should avoid. Make sure you stay away from these brokers and never forget these names.
10 Scam and Fake Forex Brokers Nigerians should avoid
|Forex Broker||❌Scam / ✔️Real|
|Oracle FX||❌ Scam|
|Swiss Assets FX||❌ Scam|
|Broker XP||❌ Scam|
|GCC Investing||❌ Scam|
|BRFX Trade||❌ Scam|
Scam Brokers Overview
👉 A broker is a connection between Nigerian forex traders and financial markets. For every position that the trader opens on their trading platform, the broker facilitates or executes the trade on behalf of the trader.
👉 Forex and CFD brokers make their money in several ways, with the most common being the spreads and commissions charged by the broker. In addition, market maker brokers are a type of broker that can benefit from their client’s losses because they take the opposite side of the deal, providing their clients with liquidity and the assets that they wish to buy.
👉 Hundreds of legitimate brokers offer safe, fair, and transparent trading environments for their clients. However, some individuals have seen an opportunity to make money by pretending to be legitimate brokers to accelerate the loss of traders to make money, or to make more money.
👉 There are also malicious entities on the Internet that clone legitimate companies, making the website look official enough that traders might not notice the difference. Some pretend to be licensed brokers and who convince unsuspecting, often inexperienced, traders to invest their funds.
👉 When these traders have made a deposit and they try to execute deals or withdraw their funds, the broker will continuously provide them with excuses and the entity will make away with the client deposits.
👉 Unfortunately, this has shone a very bad light on the forex and CFD trading industry, with many individuals still too afraid to explore forex trading in fear that brokers are all scams, and that it is merely a Ponzi scheme.
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The Forex Market and Regulation
👉 Forex trading does not occur through a central exchange, as is the case with equities, instead, it is done online through a network of computers. Because of this decentralized model, there is no central authority that oversees the forex market.
👉 However, there are global supervisory bodies that regulate forex in their countries, which means that there are specific standards and regulations that all brokers within that country must comply with.
👉 This can include valid licensing and registration with the market regulator, having frequent audits carried out on all finances and accounts, submitting financial statements, communicating changes to clients, segregation of client funds, and many more.
👉 Every country, therefore, has a market regulator that sets a regulatory framework for financial services providers in their country. Some of the most reputable market regulators in the world include the Financial Conduct Authority (FCA) in the United Kingdom, the Financial Services Conduct Authority (FSCA) in South Africa, the Cyprus Securities and Exchange Commission (CySEC) in Cyprus, and several others.
👉 Forex brokers are not limited to the number of regulations they hold in different countries, with many brokers such as AvaTrade, IG Group, HFM, Exness, and others, holding several licenses and regulations globally, allowing them to provide their services and products in many jurisdictions globally and providing investors and traders with the confidence that they are dealing with a legitimate business.
How can Nigerian Traders Spot a scam or fake Forex Broker?
➡️️ Check whether the broker is regulated by reputable entities such as the FSCA, CySEC, FCA and others. Even if the broker claims to be regulated, the regulation and license numbers must be checked against the market regulator’s register. It is too easy for brokers to claim to have regulation and to provide a license number.
➡️️ Nigerian traders must contact the broker and have a conversation with support because fake and scam brokers often do not allow clients to contact them, ask questions, or obtain information.
➡️️ Watch out for unsolicited advisory, especially if the broker is extremely adamant about deposits and dealing with the company. In addition, if brokers are making unrealistic promises, they could be scam brokers and they must be reported.
➡️️ Read forums and online reviews to see what other clients are experiencing. Several websites have extensive lists consisting of blocked, scam, and fake brokers based on reports and the warnings of market regulators.
➡️️ Nigerian traders must investigate the broker before they make a deposit. Traders can search the broker’s name against complaints, verify the details of ownership, financial statements, and other information.
➡️️ Traders must check their trading statements frequently to ensure that there is no illicit activity that they did not carry out or authorize.
➡️️ If Nigerian traders suspect that they may be dealing with a fake or scam broker, they must retrieve their funds and submit a complaint to the market regulator so that further investigation can be done.
10 Scam Forex Brokers Nigerians should avoid:
- ❌ Oracle FX
- ❌ Swiss Assets FX
- ❌ Broker XP
- ❌ 100XFX
- ❌ CT-Trade
- ❌ MarketGBP
- ❌ SolidCFD
- ❌ GCC Investing
- ❌ BRFX Trade
- ❌ MaxCFD
Scam and Fake Forex Brokers in Nigeria to watch out for:
❌ Oracle FX
👉 Oracle FX is a scam broker that has been blocked by the Financial Markets Authority (FMA) in New Zealand. This comes after the market regulator received many reports involving Oracle FX.
👉 According to New Zealand residents, the broker has been cold calling residents regarding investment schemes which are nothing more than a scam. Oracle FX is not a registered entity with any regulator and global clients must heed caution in avoiding this entity.
❌ Swiss Assets FX
👉 According to the official website of this broker, Swiss Assets FX claims to be a regulated entity that offers investment services. The broker claims to have regulation and authorization through the Swiss Securities and Exchange Commission, which does not exist.
👉 Swiss Assets FX has been providing financial services to traders from around the world without the necessary licensing. FINMA, the official market regulator in Switzerland, has subsequently warned local and international traders against this broker.
❌ Broker XP
👉 Broker XP is owned and operated by Aviant Marketing Limited, an offshore entity that is registered in the Marshall Islands with a license with the Banking Commission of the Marshall Islands. There is an additional license listed on the website under M&A Mergers and Acquisitions Consultancy LP.
👉 However there are no records that confirm this, and the broker is notorious for its cold calls and aggressive marketing, trying to convince traders to deposit funds to earn thousands in profits per month.
👉 100XFX is a scam broker that is listed on several scam broker lists. The broker website indicates that it is based in the United Kingdom, but there is no valid registration or authorization linked to the broker’s name.
👉 100XFX is not regulated by the Financial Conduct Authority (FCA) and instead of being based in the United Kingdom, the broker’s address is in Saint Vincent and the Grenadines, which is an area that is notorious to house scam brokers because of the subpar requirements to obtain a license.
👉 CT-Trade has been identified as a clone company of Citibank Europe Plc. CT-Trade claims that it is regulated but the FCA license belongs to Citibank. All global traders and investors are warned by several listings to avoid using this broker.
👉 MarketGBP is operated by Silver Wolf, Ltd, an offshore company that is headquartered in the Marshall Islands. According to the broker’s website, it offers a wide range of financial instruments spread across several asset classes. There is a UK-based telephone number offered but the broker cannot be reached on this.
👉 MarketGBP is listed on the Financial Conduct Authority’s warning list as an unauthorized entity that is targeting people with unsolicited marketing.
👉 SolidCFD is a fraudulent broker that is present on many warning lists. Owned by LOK Marketing Limited, it is an offshore broker that is registered in Vanuatu through the Vanuatu Financial Commission, which is not a trusted or strict market regulator because of the low requirements to obtain a license.
👉 Nigerian traders are advised not to deal with this broker and to report any unsolicited contact.
❌ GCC Investing
👉 GCC Investing is a Bulgarian-based forex broker owned by GreenRiver OU in Estonia, with Mercure Services Limited as its payment processor, a company registered in Saint Vincent and the Grenadines.
The broker lists telephone numbers in Britain, Germany, and Bulgaria which is extremely suspicious seeing that the broker is not licensed in Europe. Nigerian traders are warned not to deal with this broker and to report any unsolicited contact.
❌ BRFX Trade
👉 Owned and operated by BR Consulting Group Ltd, BRFX is an offshore broker that is registered in Saint Vincent and the Grenadines. However, because many scam brokers originate from this jurisdiction, Nigerian traders are urged to ensure that they research the broker and confirm that it is legitimate before making deposits.
👉 Nigerian traders are urged to only use well-regulated entities that have FSCA, CySEC, ASIC, FCA, or other reputable regulations.
👉 MaxCFD is operated by Chemmi Holdings Limited, and the broker website indicates that it is based in London, United Kingdom. There is no record of regulation or license number, with the regulatory status of the broker not indicated on the website.
👉 There are, however, no records on the FCA’s register that MaxCFD is a regulated and authorized financial services provider, which is why Nigerian traders should avoid this broker.
Frequently Asked Questions
How can Nigerian Traders identify fraudulent schemes?
There are several red flags to identify scam brokers such as continuous unwanted marketing, the guarantee of profits, struggling with withdrawals, no company history or regulation, and so on.
How can Nigerian Traders avoid forex scams?
By consulting a list of companies that may be marketed as scam brokers, consulting market regulators’ websites to see a list of forex scam brokers.
How can Nigerian Traders check the regulation of brokers?
Nigerian traders can verify the regulation of a broker by consulting the market regulator of the region in which the broker is based. Nigerian traders are not restricted to only using Nigerian-based brokers and they can choose from any brokers that accommodate Nigerian traders, which makes it challenging to filter out scam brokers.
Is Forex Trading Legal in Nigeria?
Yes, forex trading is legal in Nigeria. However, forex traders in Nigerian must ensure that they deal with a legitimate, well-regulated entity.
Why should Nigerian Traders only use regulated brokers?
Because it ensures that their funds are protected. It also ensures that if there are any problems, the market regulator can ensure that it is resolved.