Monfex Scam Review – Is Monfex Too Good to be True?
Monfex Scam Review
Have you heard all the talk of Bitcoin? Nowadays, there is a lot of hype about cryptocurrencies, especially after the peak Bitcoin reached in 2017. Overnight, thousands of traders saw their fortunes change and since then, the craze of these new digital currencies has caught fire. In the last year alone, tons of new cryptocurrencies were introduced and people are flocking to this market to invest and reap huge returns in the future. Previously, cryptocurrencies were mostly unregulated, but now regulation is also being introduced for this new trading instrument and their applications are also increasing. If you are looking to enter the trading market, it would be smart to consider trading cryptocurrencies.
There are a lot of profits to be made in cryptocurrency trading, but in order to do so, you first need to find a broker who is willing to offer you these cryptocurrencies. Yes, Bitcoin is the pioneer cryptocurrency, but it is also quite pricey. You may also want to diversify your investment and invest in multiple cryptocurrencies, which are being traded these days. Several brokers can be found, which can provide you access to some important and notable cryptocurrencies. Monfex is one such broker. Owned and operated by TENB Ltd., it is an offshore CFD broker, which has kept its focus on the cryptocurrency market.
The parent company is incorporated according to the laws of Saint Vincent and Grenadines. Monfex gives traders who are interested in cryptocurrency the chance to trade 12 cryptocurrency pairs and provides them with a leverage of 1:50. Let’s take a close look at its offerings:
CFDs on notable crypto coins
One of the most prominent features of Monfex is the selection of cryptocurrency CFDs that it has to offer on its platform. When you sign up with this brokerage, you will be able to trade XMRUSD, NEOUSD, OMGUSD, ZECUSD, ETCUSD, DSHUSD, BCHUSD, LTCUSD, EOSUSD, XRPUSD, ETHUSD and BTCUSD. Basically, it gives you the chance to trade all major crypto coins paired against the US dollar.
A generous leverage
When it comes to trading cryptocurrency pairs, a leverage as high as 1:50 is more than sufficient. As per the new guidelines that have been established by the European Securities and Markets Authority (ESMA), the maximum leverage that can be given for forex transaction is 1:30, 1:20 for other CFDs and it is just 1:2 for crypto coins. However, Monfex is an offshore broker and is not licensed to provide its services in the Europe and the UK and so it doesn’t follow these guidelines. While this leverage may be helpful, it can also increase the losses you suffer.
A good BTC/USD spread
Monfex has mentioned live rates on its website and according to them, it allows you to trade Bitcoins with a spread of just 2,5 USD. This is undoubtedly very attractive, even with the 11% trading commission the broker is charging.
A reasonable minimum deposit requirement
If you want to start trading with Monfex, the minimum deposit requirement that you have to fulfill is around 0,01 Bitcoin, which is approximately $100. It is in line with what most of the other brokers require as a minimum deposit and every new trader can afford to deposit this much.
All these facts make the broker come off as a very smart choice, but the reality is that when something sounds too good to be true, it usually is. Why? There are some other aspects of Monfex that you need to be aware of before you make up your mind about the broker. What are they? Read on to find out:
It is not licensed
As mentioned above, Monfex is an offshore brokerage and its parent company is located in Saint Vincent and the Grenadines. On the islands, there is no proper regulation for the retail forex market, much less the cryptocurrency market, which means that Monfex doesn’t have a proper license. Furthermore, it also means that the broker does not have the right to provide its services in regulated markets, such as the US, European Union, Japan, Canada or Australia. Hence, all of Monfex’s operations in these markets are essentially illegal.
Furthermore, you should also not that it is incredibly risk to trade with an unregulated broker because these brokerages are unaccountable for how they are handling your money. In most cases, they are part of some scam or another.
The trading bonuses come with restrictions
It is true that Monfex offers its traders a trading bonus and mostly it is a trick to get people to deposit more money in their accounts. The problem with the broker’s trading bonuses is that they come with some minimum deposit and trading volume requirements. If you are unable to meet them, all your withdrawal requests will be cancelled. Offering these trading bonuses is regarded as a controversial practice in Europe and licensed and regulated brokers are no longer offering them to traders.
It does not support MetaTrader 4
If you are familiar with the trading world, then you probably know that MetaTrader 4 (MT4) is the most popular platform in the market. Yet, Monfex has decided to introduce its own web-based platform, which cannot offer the same features as the MT4. It does not allow you to run automated trading sessions as you can do with MT4 through the use of its trading robots called Expert Advisors (EAs). Furthermore, it lacks the charting tools and trading indicators that MT4 can offer.
It has limited payment methods
Last, but not the least, Monfex allows its traders to make payments through only a few payment methods. It accepts crypto payments in the form of Bitcoin, Tether and Ethereum and supports Visa and MasterCard. But, it doesn’t provide support for other e-payment methods and an outside company processes its payments, which can create security risks.
Monfex is an offshore broker that has low credibility and no regulation due to which it is better to avoid it, despite its impressive crypto offerings.