What are the risks of trading with offshore forex brokers?

1
We often talk about the risks of trading with unregulated brokers, but there's another topic that is just as important but often remains overlooked, and that topic is the risks related to trading with brokers regulated in offshore zones.

Offshore destinations are famous for its light touch regulation, if any. They are attractive locations to forex and binary options brokers, as it is relatively easy and cost-effective for startups to register and run a brokerage business. Besides, offshore zones are generally known for their lax regulation and non-existent corporate taxes.One of the most popular offshore jurisdictions are Belize, Mauritius, Saint Vincent and the Grenadines, Marshall Islands, British Virgin Islands, Cayman Islands, the Seychelles, Dominica and Vanuatu and there are various risks related to working with brokers licensed in such places.


Re: What are the risks of trading with offshore forex brokers?

2
Greetings,
The risk of trading comes from the weak and light regulation on those exotic places. I believe every one would prefer his broker to have a solid regulation in Europe and in case you have an issue related with very bad executions cost you a lot of money or other issues when the disagree between the both sides may came into a court, you have to be sure that your interest would not be ignored or just to see how the broker steal from your account.
Bottom line: just to be on the safe side, would be good to avoid any brokers regulated in the above mentioned countries

Re: What are the risks of trading with offshore forex brokers?

3
The risks of trading with a broker from an offshore country is that there is usually no regulation in those countries what so ever. No regulation means anything goes including higher possibility of that broker being a scammer (bucket shop) that uses broker plugins to manipulate trades and may give you a hard time when it's time to withdraw your funds.

Don't risk it and trade with a reputable broker. Even with reputable brokers we've seen scams going on like good old FXCM so always be sure to check the reviews of a broker before trusting them with your money.
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