Beware! 1stcoin is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
If trading in cryptocurrency is what you are looking for, you may think that 1stcoin is exactly the right broker for you judging by the fact that it offers exclusively trading in cryptocurrency to its clients. However, the question is how safe for your funds it is to join this broker.
1stcoin Regulation and safety of funds
As with all forex brokers that we write about, the first thing is to check their registration and verify their legitimacy. We found out that 1stcoin is operated by TCS Group Holdings Ltd. with address in London, UK. We check the register of the Financial Conduct Authority (FCA), the official body in the UK that regulates forex broker to find out if the name of the company is in the list of registered companies. As you can see from the image below, it is not. Non-registered and non-licensed brokers are not reliable to trade with and we advise you to stay well away from this broker!
If you are looking to select a UK forex broker to trade with, we must advise you to check if the said broker is registered with FCA because only licensed and regulated brokers can provide you with protection against scammers and with a guarantee for the safety of your funds. To get their license, brokers must meet various rigid requirements. First of all, they must have an initial capital of no less than 730,000 EUR which among other things serves as a barrier against scammers. As you can imagine, scammers will never invest such a huge amount of money for the benefit of looking legit. Other measures against scammers and to protect their clients’ money include keeping clients’ funds segregated with tier-1 bank establishments, reporting transactions on a daily basis for the sake of transparency, provide protection against negative balance, etc. One of the biggest perks in choosing a licensed forex broker from the UK is the fact that they must participate in the local Financial Services Compensation Scheme from which in case of bankruptcy their clients will be compensated by up to 85,000 GBP per person.
We also recommend researching forex brokers from the EU if you wish to expand your trading options. EU brokers regulated by CySec must fulfil conditions similar to the ones in the UK for providing protection against scammers and a guarantee for the safety of the clients’ funds. The only difference is that the brokers regulated by CySec participate in the local Investor Compensation Fund which can provide up to 20,000 EUR per clients in the form of compensation if the broker is declared bankrupt.
1stcoin Trading software
The trading software offered by 1stcoin is a web trader and the trading products include trade in cryptocurrency. From the screenshot below, you can get an idea what the web trader looks like. On the left, there are the buttons for opening and closing transactions and in the middle, you see displayed the chart for the BTC/USDT cryptocurrency pair with the fluctuation in its price in a given timeframe. On the right, there is information about the same pair that includes the values of the leverage, maintenance margin, etc. Below the chart, there is a list of other cryptocurrency pairs with their bid/ask price. From the bid/ask price for BTC/USDT we can calculate that the spread for this pair is $184. We must say that this spread is too high and the implications for traders are that the cost of transactions will be too high and they won’t be able to make a sustainable profit in the long run.
In addition to that, the leverage which you can see in the screenshot is too high – 1:5. First of all, using such leverage is another proof that this broker is not legit. In the UK, there are restrictions on leverage imposed by FCA and for cryptocurrencies, the leverage cannot exceed 1:2. Using high leverage amplifies the potential of experiencing greater financial loss in transactions, so we do not recommend trading with brokers that offer leverage which will put your hard-earned money at risk.
We would like to advise you that in contrast to this broker that offers only trade in cryptocurrencies, other forex brokers have a bigger diversity of trading instruments and offer better trading platforms among which we want to mention MetaTrader 4 and MetaTrader 5. These two trading platforms offer far better trading options than a web trader. They come equipped with an auto trading option, code base with customs scripts, trading signals, VPS, a financial calendar, an app market, etc. The charting options and the technical analysis indicators help traders predict the future direction of exchange rates and thus, make a profit. We strongly recommend selecting a licensed broker that offers either platform for your enhanced trading experience.
1stcoin Deposit/Withdrawal methods and fees
Traders can choose from 5 trading accounts that include Bronze, Silver, Gold, Premium and Platinum. The minimum initial deposit for the Bronze account is $250. The other accounts start at $1,000, $5,000, $10,000 and $50,000 respectively.
The processing time for a withdrawal request is between 1 and 3 business days and all accounts include a monthly withdrawal fee. If the client chooses to withdraw via bank transfer, then the fee will be 50 EUR.
According to the company’s regulations, a trading account that stays inactive for 90 days will be charged 50 EUR monthly fee.
If you look at the account information on this broker’s website, you will notice that for each account, there is a bonus offered by the company and it starts from 50% for the Bronze account and can go up to 200% for the Platinum account. What you need to be aware of is that bonuses are funds that belong to the broker, not the trader and they usually have some heavy to fulfil conditions attached to them. However, nowhere on this broker’s website could we find any of these conditions which makes it even more suspicious. We strongly advise you to refrain from trading with brokers that offer bonuses and to keep in mind that licensed brokers never offer bonuses.
How does scam work?
Scam works in different ways. It could be either that you receive an unsolicited telephone call or you see one of these flashy ads on the Internet or the social media promising you a quick and easy profit. Scammers will promise you the sky and the earth until you give way to temptation and deposit money. Once you give them money you get caught in the scammers’ mousetrap and the cheese in the shape of a big fat money fall is gone! It may take some time before you realise that you are being scammed. Scammers are smooth talkers and they are masters of deception. They will give you some excuses as to why the big profit hasn’t come yet and will try to lure you to make even a bigger investment because according to them, the more you invest, the more you profit. After you have been waiting for a while and you finally come to your senses, you realise that you are being scammed. All you want now is to get your money back and get out of there. However, the scammers won’t make it easy for you! They will try to delay you so that you miss the deadline for applying for a chargeback.
What to do if scammed?
There are a few things that you must do immediately – file for a chargeback if you have paid using a VISA or MasterCard. Those two payment providers allow you 540 days time frame within which you may file for a chargeback.
However, the chances are grim if you have used bank transfer or Bitcoin as a payment method. There is no chance you’ll be able to recover your money.
In such a desperate situation, some so-called ‘recovery agents’ may approach you with offers to recover your money for a fee. Be cautious as you may be dealing with another type of scammers. Always check the information about the recovery agency – make sure it is legitimate and transparent in the public eye. Also, some scammers publish personal comments after our review about how they have been scammed and how they found a recovery agent who helped them get their money back. Do not trust such comments and do not use the published contact info in them as it will lead you to another scammer!
And lastly, a reminder to cancel your credit card if you have given your CVV code to the scammers and erase any software from you PC that gives the scammer access to your personal data.
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