All Regulated Brokers are Honest Brands and all Unregulated Brokers are Scammers?

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Although the question from the title might be a little confusing, in reality, it aggregates two of the most common dilemmas people have when looking for a reliable trading brand to work with. Brands have a certain reputation and impression to save as their name is what attracts the majority of their customers. Therefore it is more likely that brands do not trick or lure customers into the traps. However, that is not the case with every well-known and well-reputed name, the brands. The scammers, if not the brand authorities themselves, but the general public in this growing technological world manage to deceive people to accomplish their unethical purpose. This article will focus mostly on Bitcoin and crypto trading scams, considering this is a growing industry and the enthusiasm generated makes people forget about taking care that their broker is a reliable partner. The hypothetical statement regarding unregulated brokers on the platforms of Bitcoin and Crypto are scammers will be evaluated and analyzed by considering several aspects and stories.

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The Importance of Regulation for Crypto Brokers

We would like to reemphasize that regulation for a Bitcoin and crypto broker is as important as for any usual CFD or Forex provider. Regulation makes insurance of security of work and business from both sides: the broker and investors. The companies seem to be worn out, out, and crippling without the constitutions to carry out the internal affairs and guide the scope of working. The broad cryptocurrency market is not yet fully regulated, and most traditional exchange platforms operate via an offshore entity, ensuring a low degree of transparency. As a result, when traditional brokerage houses started to integrate crypto-based instruments, the valuations were still coming from liquidity providers (a.k.a. traditional exchanges), leaving them open for manipulation (pump-and-dump, spoofing, wash trading, etc.).

The situation gets further complicated and stressed out because of the lack of accountability from the authorities running this business and the software technology employees. The increasing reports of scams worldwide, on a regular basis, do witness the poor management of the crypto company merely due to the regulations not being practiced, or not even being implemented. Regulations, like any other business and company, should be made compulsory for each and every broker to ensure the protection and security of crypto and Bitcoin users. However, it will complicate the operations of the crypto companies which will further restrict the people from entering this industry as they will have to go through procedures and structures to ensure their entrance as a broker. 

Working with a regulated broker that has support for several cryptocurrency assets will help you not fall into a potential crypto trading scam. Being regulated by a well-known entity is one the proof the broker is committed to high trading standards and combined with a clean reputation, it only reinforces the fact that the entity will work on your behalf. However, the credibility and regulation of a broker is a question and misery unless you do not start working with them. As it is essential for an investor to coordinate and cooperate with brokers in order to make the business on the crypto platform work because it is complicated and requires skills and knowledge to run the business and generate money through crypto. Therefore, the option of brokers is present for people who have money but lack skills. Likewise, the brokers can earn money as their commission from the investors’ money if they perform their task with regulation and honesty. 

guy on suit

A Bitcoin scam, on the other hand, will display similar hints as to any other trading scam. It will promise exaggerated profits (no one can guarantee a certain level of profitability in the trading world), demand a high initial deposit, and advertise “premium trading conditions” when in fact there’s nothing out of the general conditions. The brokers use this trick and have been using it for a long time to lure the investors, the victims, into their trap by offering them a good amount in return for investing. Further, the brokers somehow make the investor click on the link they have provided, by convincing them that it is part of the registration process or it will lead to more profit. Thus, that link either hacks their gadgets and accounts or the link codified in binary language gets permission to get access to the investor’s account. The law even becomes ineffective and impractical when it comes to providing justice to the investor, in addition, the investor also loses the financial assets and money invested in the latter case. 

Regulated Broker = Trusted Brand?

Does it mean that a regulated brand is necessarily a trusted brand, though? A regulated or multi-regulated broker has little chance of being a Bitcoin scam. Becoming an authorized and licensed financial services provider requires a lot of paperwork and at the same time, it comes with supervising after the license has been granted. These brokers are constantly monitored by financial regulators and with that in mind, their interest is to follow good work ethic principles. Thus, the brokers with regulated and structured work ethics benefit the company more as they attract more investors. For instance, many investors have stated that they advise their friends, family, and colleagues to join the crypto platform after their great and profitable experience. Thus, if the broker is unregulated and a scammer, the negative word of mouth will be spread leading to a reduction in the number of investors as they will start withdrawing and leaving the company. 

However, regulation is not the only requirement for an honest and trusted brand. Such a reputation is built over the years based on transparent feedback from already-existing customers. It is possible to have a broker that is regulated, yet its services are below the market average. Trading costs are elevated, the customer support is poor, and the overall trading features are modest, as compared to other brands. All these aspects are considered by the users before joining, thus, they after trusting the well-structured working ethics join the brands. Later, those brands due to letting unregulated brokers work in their space along with lacking accountability and transparency encourage the scams and the frauds to elevate.

That may not be a crypto trading scam, but you should still consider avoiding it because you can find more benefits in other places. Still, keep in mind that regulation is an important requirement when choosing a trading partner, but not the only one you should look at. The required knowledge and awareness might help you identify the best and the most suitable characteristics required for the broker to not turn out as a scammer.

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    Unregulated Broker = Scam?

    When finding a broker that is not regulated by any financial agency, the risk of falling victim to a  Bitcoin scam increases. A regulated broker shows commitment to comply with the law, sometimes the strictest requirements in the world, and thus prove high trading standards. Additionally, the regulated broker makes sure of the transparency of investors investing money and profit, thus, the utmost honesty and professionalism is practiced by the broker who is willing to work with regulations.. An unregulated broker wants to cut corners and operates under the radar, having the ability to create an environment in which customers can be taken advantage of. The investors, being unaware of the operations and manner of working on the crypto platforms and accounts, easily fall into the traps of the scammers. 

    Unregulated brokers have weird terms and conditions, setting up rules that at any point can block a trading account and seize all the funds in it, leaving the investor in a devastated and shattered state. Unfortunately, people should have been aware of this, because all the details are already mentioned on the broker’s official website. Further, our website, the fund trace, has shared multiple articles and blogs to spread awareness among the users so they can avoid frauds and scams in their experience of crypto usage. We don’t think that a broker not paying attention to regulatory compliance should be your trading partner, even though it has not yet been flagged as a scam.

    broker on laptop

    The regulatory broker makes the investment and business convenient for you, however, the non – regulatory broker makes you stuck in a never-ending loop of duplicity and deception. Thus, the unregulated brokers through their actions keep on boring the seed of their illicit goal, which gets revealed in the end resulting in blackmailing, stealing, and leaving the investor in the worst possible condition. The scammers, if not stopped or taken action against, keep getting better and better at tricking and tripping people. Although the studies have shown that the majority of scammers use the same or similar tricks. Thus, they follow the same pattern which begins with disobeying and going against the formulated regulations of the company. Investors can only save themselves from the scammer’s ill intention by having a considerable amount of knowledge regarding their patterns, manner of conducting frauds, and the scammers’ techniques themselves. The user can consult our website, the fund trace, in order to get all kinds of required knowledge along with instances and experiences of others in order to help users understand scams better. 

    Reputation and Customer Feedback Matter in The End

    Although regulation is one of the key parts, it is important to note that the overall broker reputation and transparent customer feedback are the foundation for building honesty and reliability. Brokers that qualify, had been in the industry for years and in doing that, had passed the ”test of time”. A Bitcoin scam is generally a website that has been launched recently, has little background in the world of trading, and has little or poor customer feedback along with a lack of accountability and tracing of brokers/ scammers.

    Although an unregulated broker is not necessarily 100% a crypto trading scam, it would be appropriate to not let the regulation aside. Keep it in mind and on top of that, look at other particularities that might give more insights into the level of the broker’s professionalism.

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    Trading Crypto with The Right Broker

    If you want to trade cryptocurrencies, yet avoid getting involved in a crypto trading scam, it is important to work with a broker that has support for some of the popular tokens. There are numerous reports that most of the altcoins are not reliable and because of that, the brokers focusing on large-cap tokens are the most trusted brands.

    Also, regulation, trading costs, features, and tools, as well as the already-established reputation, will need to be part of your decision-making process when choosing the right crypto broker. The right broker will not demand unnecessary money or actions to be performed by you. For instance, the broker who is intended to make you lure in his trap is more likely to make you follow links or transfer them more money, in order to get access to your personal details and accounts.  Therefore, considering several factors in a company while investing your money would be appropriate, not just on the regulatory side. Fortunately, there are plenty of companies meeting all these requirements, but at the same time, it is important to note that increased crypto interest led to the appearance of many new crypto brokers that don’t have an established reputation, yet. The lack of accountability and tracing of brokers further make it a piece of cake for them to trick the naive investors. 

    If you are a victim of a Forex scam and need help in getting your money back then please reach out to us to help you!

    Key Takeaways! 

    The bottom line is that a regulated broker can still provide inconveniences if it offers access to a trading environment that’s not consistent with the latest market demands. However, regulation keeps a broker in line with the latest laws and makes sure that the client’s interests will be on top of the list. Lastly, even if an unregulated broker is not yet flagged as a scam, it should be treated with caution and your job will be to find enough evidence that it is a trusted brand, working so you will benefit from optimal trading conditions.

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      We do understand that you’ve already been scammed online and that you’re naturally afraid of paying online. This is why we do offer a free case review, and won’t charge anything if your case isn’t qualified. Please do your part of the deal, and submit your case only if you truly intend to proceed with the recovery process.


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