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Is ForexBit a scam broker?

Overview:

According to the broker’s website, ForexBit is a brand name of Alpha Capital Technology, an organization situated in Bulgaria.  As the name suggests the Broker provides trading with Foreign Exchange and Cryptos. It also features an array of CFDs. Upon inspection, it is found that ForexBit provides a single standard account. Also, misses on the information on leverages and other key elements.   

About ForexBit:

As mentioned ForexBit facilitates trading in both forex and binary options which covers a broad area of assets. It contains currencies, cryptocurrencies, indices, commodities, and stocks. It also deals with almost all cryptocurrencies like Bitcoin, Ethereum, Ripple, Litecoin, Dash, IOTA, ZCash, Ada, NEO, Bitcoin Cash, Stellar Lumens, and more. ForexBit provides dual web trading platforms – Simplex and ForexPro to choose from. The Simplex interface is used for trading in cryptos. The ForexPro is used for forex that is easy to use. Also, it is equipped with a lot of technical analysis indicators and charting powered by TradingView.

The ForexBit is not licensed either by the FCA in the U.K., or by the financial regulator in Bulgaria, or any other authority. Hence it is not covered by any regulatory oversight. The question of the security of the trader’s funds is unanswered. This is a major red flag. FCA has issued a warning for ForexBit and this firm is banned in all Europe. ForexBit charges unprecedented fees and unfavorable trading terms and conditions. Given an example, an Inactivity Fee of $50 for three months inactivity and a withdrawal processing fee of $20. These are an unnecessary burden and provides an unhealthy environment for traders. Crucial information on trading conditions, trading costs, payout percentages, and reference spreads is absent on the website. While using ForexBit’s interface one can see the unattractive spreads of 1.8 pips on EUR/USD.  The spread is fixed and high compared to the market average. The platform of ForexBit is good but compared to MetaTrader4 or 5 lacks several important indicators.  

 Conclusion

Altogether ForexBit seems attractive but it is an unregulated, unlicensed, and uncontrolled organization with very low credibility.  That is a big red flag. The trading world is full of con-artists, and thousands of investors get swindled out of their money every day. So, no matter what a broker promises or actually offers in terms of spreads or bonuses, the most important thing to look for is proper financial regulation. It applies strict rules to licensed forex brokers and sees to their compliance.