EagleFX Scam Review
Choosing the right broker is a priority for anyone who is interested in beginning their trading career. There are plenty of options you will come across during your search, which can be an advantage and a disadvantage as well. Sure, it is beneficial because it means you can find a broker that suits your needs and requirements, but it is a downside because it can make it difficult to spot scams. Over the years, scammers have become quite sophisticated and they know what tricks to use to get people to trust them. An excellent example is EagleFX, which is a scam and yet successfully convinces people to use its services.
Owned by EagleFX Ltd., this broker is based in the Commonwealth of Dominica and also provides an address in the country. The broker doesn’t offer traders tiered accounts, but it has incorporated the popular MetaTrader 4 trading platform. That’s how it plays the game. EagleFX is aware that the presence of the MT4 is always good news for traders because it is the top trading software in the market. The best brokers in the market offer the MT4 because it is reliable, easy to use and offers top-tier charting with a lot of customization options and indicators.
Free to use
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Moreover, there is a huge range of automated trading bots that have been developed for use with MT4. They are known as Expert Advisors (EAs) and they can be used for free, created on your own or bought at the MQL marketplace. When you test the trading software in demo environment on EagleFX, you will come to know that the benchmark floating spread for the EUR/USD pair is around 0.9 pips. A commission is also applicable round turn, which is around $6. Hence, the average trading costs for this currency pair are around 1.5 pips.
While this might not be that bad, the fact is that combining spreads with commission can lead to quite hefty losses on otherwise profitable trades. Moving on, EagleFX has also chosen to cover a lot of markets because it is aware that people prefer brokers that allow them to diversify as much as possible. When you sign up on EagleFX, you can trade different asset classes, which include commodities, indices, precious metals and some of the top cryptocurrencies in the market like Bitcoin, Litecoin, Ethereum and more. You can also trade numerous currency pairs via the broker, which include both minor and exotic ones.
Apart from the variety in assets, the broker has tried to put the cherry on top by offering maximum leverage of 1:500, which would certainly be impressive if the broker was not a scam. Another way the broker has attempted to gain more and more clients is by keeping its requirements for deposits and withdrawals quite low. Many newbies don’t sign up with big brokers because they have high deposit requirements and EagleFX has taken advantage of this by asking for only $10 as deposit. Thus, even people with very limited funds will have no problem in creating an account with the broker.
Like the deposit, the minimum withdrawal limit is also $10, which some may regard as another plus. In addition, the broker has also mentioned that they don’t charge any transfer fee, inactivity fee or any other fee for that matter. Now, this does sound too good to be true and as it turns out, it really is. Why? This becomes quite obvious when you decide to take a look at the license of the broker and you discover that it doesn’t really have one.
As mentioned above, the brokerage is allegedly owned and run by EagleFX Ltd., a company that has its base in the Commonwealth of Dominica. While businesses that run out of this area have to comply with some international banking regulations, the country has not introduced any regulation for forex brokers at this time. Therefore, any legitimate forex broker would not choose Dominica as its headquarters or if they do, they will definitely get licensed by the Financial Conduct Authority (FCA) in the UK or the Cyprus Securities and Exchange Commission (CySEC). EagleFX has done no such thing, which means that the broker does not have a legitimate license for offering its services in Europe, Australia and Japan.
It is operating unlawfully by targeting customers in these markets. Also, the broker claims to be serving customers in the United States, which doesn’t seem right. In order to do so, the brokerage would need to be licensed by the CFTC, comply with all regulatory laws and have to have a huge capital to quality as a legitimate company. Suffice it to say, if it is servicing US clients, it is doing so illegally.
You will get more proof that EagleFX is shady when you take a close look at the address they have provided. It is actually the address of a small, country hotel called the Roseau Valley Hotel. This hotel is renowned for sheltering a number of other offshore companies including Options Tech Limited. This company operates under multiple names, such as UBS InvestmentOptions Tech Limited, United & Equal, Unitedmarkets4you, Cryptex Markets, UBS Investment and Block Chain Exchange Pro. All of these have been blacklisted by the Financial Conduct Authority (FCA) for being potential scam brokers. It should also be noted that the address provided by the broker also appeared in the archive of Panama Papers in connection to various other criminal activities.
Regulators in other countries have also blacklisted companies sharing the same address. If you also take a look at EagleFX’s payment options, you will notice that it has not added e-wallets, such as Skrill and Neteller. This is worth mentioning because Skrill has recently adopted an anti-scam policy according to which it will only partner with licensed brokers from now on. In a nutshell, the fact that EagleFX is not licensed and has a shady background should be reason enough not to use the broker’s services and not get tempted by its extensive range of assets and deposit requirements.