The cryptocurrency trading market is getting bigger and bigger with every year that passes by, and these days, while we spend most of our time at home due to the forced lockdown, even more people are looking for new ways to make some extra cash from home.
With so many cryptocurrency trading brokers available these days, it’s hard to tell which one is trustworthy and which is another trading scam in disguise. One of those brokers, Monfex.com, claims it’s a “trading platform you can trust,” and in this Monfex review, we’ll examine if that’s really the case or just another sleek sales pitch. After all, our goal is to make sure you’re not just throwing away your hard-earned money. So, keep on reading to learn if Monfex is a legit cryptocurrency trading platform or possibly a scam.
Table of Contents
So, what is Monfex?
Created by a team of finance and tech experts (at least that’s what it claims), Monfex is an offshore brokerage firm offering trading options for 12 cryptocurrency tokens, and overall more than 200 trading instruments, including forex (i.e., currencies), stocks, indices, and commodities. The platform requires a minimum deposit of 0.01 BTC (Bitcoin) or about $130 at current market prices. Monfex’s trading fees and financing rates are surprisingly quite reasonable (some trading platforms tent to go over the top with those), at 0.075% and 0.069%, respectively. The platform offers cryptocurrency CFD trading (CFD stands for ‘contract for differences’) for several highly-popular cryptocurrency pairs.
Is Monfex a scam platform or legit?
Naturally, in order to determine if Monfex is indeed a legit trading platform as it claims or another scam broker, we had to go much deeper and look for some “red flags” (if there are any) which might make some traders think twice before they invest in it. Here’s what we found while performing our Monfex review:
Rigged Demo Account
Once you visit Monfex’s website, you’ll be offered 1BTC to trade on one of their demo accounts. When you start your first trading session, you are likely to see a whopping 98% trading success rate. Sounds fantastic, right?
Well, it all sounds too good to be true because the platform basically gives you an unrealistic profit margin. Of course, your natural reaction would be to expect the same high success rate when you start investing and trading with real funds, especially if you’re a newbie trader. Well, Houston, we have a problem. Soon you’ll notice that your trading success rate is dropping significantly, and you might start losing money (and this time real hard-earned money).
In a good and honest world, demo accounts are supposed to be programmed as a reflection of real market conditions. However, that’s definitely not the case with this particular trading platform.
Suspicious Bonus Clause
As with some other trading platforms, once you sign up with the Monfex trading broker, you’ll be offered a trading bonus. This practice is considered to be a bit controversial, and in fact, it has been banned in Europe, as well as in other regulated financial markets. During our research, we found out that Monfex will only allow you to withdraw your special bonus funds after you’ve traded at least 100BTC, which is an extremely high amount, so by now, you can surely see why this trading ‘bonus’ is tagged as a big red flag.
Those requirements basically mean that you’ll have to trade in high volumes of at least $1.29 million! Unfortunately, this makes it practically impossible for you ever to withdraw your bonus funds, even if you rightfully deserve it.
Lack of Regulation
According to our research, the ownership of this trading broker belongs to TENB Ltd., and it is registered in St. Vincent and the Grenadines (SVG), which is a small southern Caribbean nation.
So by now, you probably wonder, “What’s wrong with that?”
Well, there’s something very important you must be aware of. The St. Vincent and the Grenadines government has repeatedly stated in public that they do not oversee foreign exchange (AKA forex) trading. Plain and simple. So this means that any trading done in a platform that’s registered in this location is basically unregulated (again, huge red flag). True, your trading is done online, but the fact that the headquarters of this broker is in SVG still makes it an unregulated trading platform, which is risky for traders.
Besides the risk for traders, as explained above, the company does not have a legal right to trade on regulated markets. Even more importantly, it suggests a reasonable possibility that Monfex is, as suspected, another scam cryptocurrency trading broker.
Truth be told, there are several things that supposedly make Monfex an attractive cryptocurrency trading platform. It offers a wide range of trading assets (in the form of CFDs), the minimum deposits are quite trader-friendly, and it provides high leverage. But you can’t let these so-called attractions deceive you, or your money might be at risk. The platform raises a few red flags that strongly suggest you better look elsewhere if you really want to invest in cryptocurrency trading and make real money out of it. All the above-mentioned warning signs indicate that Monfex is a scam – so don’t fall for it.