How to Identify Forex Scams-A Case Study of TOKYO

Do you know the forex market is the largest financial market in the world, with over US$5 billion traded every single day？ Driven by high profits, illegal forex brokers take every chance to exploit this 24h/5days market for illicit profits.

Watch out! You may be targeted by forex scams

The forex market may seems lucrative, but it's never easy for investors to profit. Adequate trading skills, long-term practice, sound risk management are all essential for successfully reaping the financial gains. Unfortunately, there are many unscrupulous illegal brokers who try to swindle individuals through forex trading scams. WikiFX notices that investors usually fail to identify the warning signs of a forex scam, until their withdrawal attempts are constantly blocked.

How to identify forex scams - the example of TOKYO

Suppose you‘re a forex scammer yourself, what would you do ？ It is, without doubt, a hard thing to persuade an investor to deposit at a forex platform, not to mention you are just strangers who have never met each other. But why so many victims are still being cheated unconsciously？ Nowadays, illegal brokers are becoming more sophisticated, finding new ways to trick investors. So, how to identify these scams？ let’s look at the case of an illegal forex broker ---TOKYO.

Mr. Lu was one of the victims of TOKYO. He reported TOKYO to WikiFX in his real name, in hope to warn other investors against the broker. TOKYO, registered in China, has conducted business for less than a year. From WikiFX App, we found TOKYOs score is only 1.12, and its risk warning shows TOKYO has no valid license.

So why would Mr. Lu be deceived by such an unlicensed broker with a poorly designed web page？ As we could see from the complaint and transfer records, Mr. Lu had never doubted the compliance of TOKYO, trusting the broker completely. This may be for the following 2 reasons:

1. Forged regulatory information

TOKYO's website claimed the broker is supervised by four top international financial regulators, namely VFSC(Vanuatu), NFA(US), FSC(Bulgaria) and FSA(UK), thus deceiving Mr. Lu completely. But through investigation, WikiFX staff did not find any information of TOKYO on the official websites of those regulators, indicating the brokers regulatory information was forged.

2. The first few withdrawals were successful

Mr. Lu's first four withdrawal were successful, while the later withdrawals all failed. Apparently TOKYO made much efforts to assure Mr. Lu the safety of the investment at first, in order to induce Mr. Lu to increase the amount of investment.

How to avoid forex scams？

Illegal forex brokers tend to target forex beginners. The best way to avoid forex scams is by getting an all-round trading education, so you are well-prepared before you enter the forex market. Besides, compliant brokers can always prove their legitimacy. If you suspect that a forex broker is lying about its regulation, you can ask a regulatory authority to provide a list of regulated brokers. You can also search the forex brokers name on the WikiFX APP to find out its detailed information as well as the recent exposure cases of illegal brokers. This will tell you which forex brokers to avoid.