Forex Withdrawal Scam
You may be thrilled to trade forex online, because the broker told guaranteed you they’d double your money in a few days or weeks and they seem to know what they are talking about. Perhaps you’ve heard that these kinds of promises are signs of a fraud, but your trades seem to be winning. However, when the broker won’t give you access to your so-called winnings, you realise you’re dealing with a forex withdrawal scam.
What Is Forex?
Forex is trading currency pairs. For instance, If you think the USA dollar is going to perform well agains the euro in the coming weeks, you’ll trade this currency pair and make or lose money depending on how strong the dollar is against the euro. Successful forex traders have a thesis going into the trade. They may feel that a country is going to see economic improvement or another country is going to have a disastrous election result.
However, forex traders are prepared for the unexpected. Natural disasters or a huge institutional investor buying or dumping large amounts of currency without warning can dramatically affect the forex market. It’s clear that forex trading is a very high-risk investment and it can be difficult for beginning forex traders to make money trading currency pairs.
Is Forex a Scam?
There are so many forex trading scams that many people immediately associate the term forex with ‘scam’. However, this isn’t accurate. Forex, as described above, is simply trading currency pairs. There is nothing inherently fraudulent about that. So why are there so many forex frauds?
One reason is the popularity of the term ‘forex’. Although myriad scandals and scam forex brokers have tainted the name, it’s still associated with promises of making huge amounts of money trading.
A second reason is that forex, unlike many other types of trading, is relatively easy to understand. Many people think they can understand forex based on their own experience exchanging foreign currency. However, even though forex may be comprehensible, it’s very high risk and it’s not so easy making money as a forex trader, at least in the beginning phases.
A third reason fraudsters like to offer assets such as forex and cryptocurrency is that they are highly volatile. One red flag for a broker scam is offering only high-risk asset classes, such as forex and cryptocurrencies. The reason is clear — they can easily claim that the customer lost money on a trade because the forex market moves so fast. That allows them to pocket the client’s deposit.
Fraudsters can’t get away with lying about the performance of stocks or commodities the way they can with forex. The market turns on a dime, whereas stocks tend to be less volatile. Therefore, it’s easier to fool the client about forex performance.
How Does a Forex Withdrawal Scam Work?
A forex withdrawal scam, as the name suggests, works by getting people to deposit money and refusing to allow client withdrawals. The first thing they’ll do is offer forex trading online and focus on people who are particularly vulnerable – those who don’t have trading experience or who desperately need money.
The forex withdrawal scam will demand huge deposits and claim that the client will make a huge amount of money. The trading platform is fake and will show phony returns. The scam broker will either report that the client made money on the trade or lost it. In either case, they’ll encourage them to deposit more money. In some cases, they’ll release a small amount of the funds to the trader to give the impression that they are trustworthy.
However, if they do allow a small withdrawal at the beginning, this is the only money the client will see. The forex withdrawal scam will demand that the victim deposit more and more money. However, when the client wants to withdraw money, the fake broker will do one of the following:
- Claim the client needs to trade a certain volume before withdrawals are allowed
- Claim that they will have to pay a huge penalty fee
- Say that a huge amount has to be withheld for tax purposes
- Offer them the opportunity to withdraw the money in the form of a worthless crypto token
- Give a certain time frame for withdrawing money and disappear before the deadline
- Disappear without warning
A forex withdrawal scam can find many excuses to avoid giving withdrawals.
Is Fund Recovery from a Forex Withdrawal Scam Possible?
Even though getting money back from a forex withdrawal scam may seem hopeless, fund recovery is possible with professionals at your side. Fundrecovery Australia professionals will consult with you and map out a strategy that will improve your chances of getting your money back. We have extensive experience in fund recovery as well as working relationships with major banks and regulators and can bolster your case.
Have You Lost Money to Forex Trading Scam? Fundrecovery Australia Will Help!
Fundrecovery Australia is staffed by forex experts who use specialised technology and methods designed to uncover information about unregulated forex brokers. We consult with clients, launch an investigation and create reports that can help you succeed in recovering your funds.
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