CoinBits review – 5 things you should know about coin-bits.co

Beware! CoinBits is an offshore broker! Your investment may be at risk.

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CoinBits is an offshore broker claiming to offer trading in Forex, Stocks, Commodities, Indices and Bonds.

They do not offer different accounts – the account types page said simply “Coming Soon…” They do not have a Demo account option also.

We registered for an account by providing our names, email address and phone number, and received a confirmation email. When we were transferred to the client area, which also acts as a trading platform, it turned out the only assets CoinBit actually offers is cryptocurrencies, there are no forex pairs, stocks or anything else.


CoinBits Regulation and Safety of funds

CoinBit’s website is “owned and operated by Gama Solutions Ltd., Suite 305, Griffith Corporate Centre, Beachmont, P.O.Box 1510, Kingstown, Saint Vincent and the Grenadines.” SVG is an offshore jurisdiction in the Carribean where registration procedure for a business entity – International Business Company (IBC) – is simple and inexpensive and brokerages face limited regulatory supervision, if any.

Actually, SVG does not regulate or license forex brokerages, so any broker claiming to be regulated by their authorities is not regulated at all. That is why we generally advise traders to avoid offshore companies and to invest with brokers regulated by reliable authorities such as the UK’s Financial Conduct Authority (FCA), or the Cyprus Securities and Exchange Commission (CySEC).

These watchdog agencies impose strict rules on the brokers they license – Client Account Segregation requires that clients’ funds are kept separate from the broker’s operating funds, while Negative Balance Protection ensures that traders cannot lose more money than what they invested. Other policies include a Minimum Capital Requirement of 730,000 EUR in order to guarantee the broker’s good financial standing and participation in Compensation Schemes, which provide additional assurance for investors’ funds up to a certain amount (85,000 GBP in the UK and 20,000 EUR in the EU).

CoinBit’s Contact Us page does not provide an address but only a UK and a Switzerland phone number and an email address. Because of the phone number we checked the FCA’s database for such entity and we found a warning to potential investors that the firm is providing financial services or products without authorisation – see for yourself:

Considering the above, we can say with certainty that CoinBits is an unregulated, offshore broker and they are not bound by any rules or policies imposed by recognized regulatory bodies. We advise our readers not to invest with them as there is no guarantee for the safety of their funds.

CoinBits Trading Software

CoinBits claims to offer top trading conditions and multi-platform trading options, including the MetaTrader 4 (MT4) software. The fact is, however, there are no MT4 download links – this is just another empty claim, such as many others we find on their website.

The only platform this broker provides is the web-based software we saw in the screenshot above – a rudimentary application, quite limited in terms of features and design.

Respectable brokers provide access to established trading software for their traders, such as the MT4 or MetaTrader 5 (MT5) platforms. MT4 is considered the world’s number one platform, preferred by over 80% of users. It offers an intuitive and user-friendly interface, advanced charting and analysis tools, as well as copy and auto-trade options. Its successor, MT5, has some advantages – it allows traders to execute trades on different financial markets through a single account and there is a hedging option. Both platforms are available as desktop, web and mobile (iOS and Android) applications as well.

CoinBits Trading Conditions

The brokerage advertises tight spreads on its website and this might be their only valid claim – the BTCUSD spread we see in the trading platform is quite competitive. Considering the dubious nature of this platform we would not assume its data is 100% accurate.

CoinBits offers flexible leverage of up to 1:400 when you create a new account in the client area. Offshore brokers enjoy no restrictions on leverage, but leveraged trading entails significant risks, especially to inexperienced traders. High leverage provides huge profit potential, but also presents great risks to the traders because any losses incurred will be multiplied. That is why, most regulatory authorities impose leverage caps for non-professional traders: in the USA it is 1:50, while for brokers licensed in the EU and the UK it is 1:30. The Australian Securities and Investments Commission (ASIC) will also restrict leverage for major currency pairs to 1:30 from the end of March this year.

CoinBits Deposit/Withdrawal Methods And Fees

The broker claims to provide a number of different payment transaction methods for deposit and withdrawal, including credit cards, wire transfer, electronic payments and alternative methods – “over XXX payment methods” – as we can see in the screenshot below (apparently they forgot to put an actual number in the placeholder):

We were not able to verify any one of these methods, however – when we clicked the Deposit button in the client area there was a message “Deposit is currently unavailable. Your account manager will contact you shortly.” Respectable brokers generally provide a number of deposit and withdrawal methods, including wire / bank transfers, credit / debit cards, PayPal and e-wallets, such as Skrill and Neteller, and usually charge no or minimal fees for these transactions.

CoinBits also says traders’ accounts can be maintained in EUR or GBP base currency, but in the trading platform some kind of shady cryptocurrency, UST, was assigned to our account and it could not be changed. There is no minimum deposit amount specified anywhere on the website or in the client area, and the deposit option is not working. What we found out is that the minimum amount of withdrawal via a wire transfer is 10,000 EUR/GBP, which is extremely excessive.

Regarding transaction fees there are also inconsistencies – the About Us page says there are “no trading fees or commissions,” but as we saw on their homepage they charge $4.95 per trade, which is a fixed commission. CoinBits also charges withdrawals processing and handling fees, for which a fee schedule is supposedly available, but we were not able to find it.

In conclusion, we want to note again that CoinBits is not a regulated broker and almost certainly a scam – investing money with them is a huge risk!

How does the scam work?

Users often fall prey to very simple but quite efficient scams. The first snare is usually an internet ad promising big profits over a short period of time, and all you need to do is provide your personal information, usually email address and phone number. If you do that, you will start getting calls from scam brokers who will continue with the pitches of quick and easy profits until you decide to make a first deposit of $200 to $300. On these funds the scammers get a fat commission and transfer you to senior “brokers”.

These expert con-artists are smooth talkers who start talking you into putting even more money in, because “now is the perfect moment” or “the more money you invest, the higher your profits will be”. Usually about this time most traders will start to feel the scam and will want to withdraw their money and get out fast.

Unfortunately, the scammers will not give in easily. First, they will try to persuade you not to withdraw right now because you will miss on “big profits”, and if that does not work, they will find numerous reasons to deny or delay your request by asking you for additional documents or claiming that there are some other causes for not executing the withdrawal. The ultimate objective in such procrastination is to make the traders miss the crucial period in which a chargeback request can be filed, and thus lose the chance of getting their money back.

What to do when scammed?

If you used a credit card to make a deposit with the scammers you should immediately file for a chargeback. Both VISA and MasterCard have increased the time in which you can file to 540 days, in part specifically to fight such online scams.

If you used bitcoin or some other untraceable source, however, chances of recovering your funds are slim. You might get approached by so-called “recovery agents”, but don’t fall for their tricks. They will ask for payment up-front to recover your money, but this is just another scam and you will not get anything back.

Rich Snippet Data

Reviewer

The Forex Review

Review Date

2021-01-05

Reviewed Broker

CoinBits

Broker Rating

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