Beware! BTCMarketz is an offshore broker! Your investment may be at risk.
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
BTCMarketz is an offshore broker that offers trading in Stocks, Commodities, Indices and Currencies “based only on CRYPTO Exchange” as they put it on their website. The way we understand that is that all trading instruments can be traded only in pairs against cryptocurrencies.
They advertise 5 types of accounts – Micro, Bronze, Silver, Gold and Platinum – differing in the upper limit of the balance on the account. As can be seen from the screenshot below these balances are expressed in USDT which stands for the Tether cryptocurrency – a stablecoin originally designed to always be worth $1.00. They do not have a Demo account.
The registration form we had to complete asked for First and Last name, Email address, Phone number, Country and a Cryptocurrency choice between Bitcoin (BTC) or USDT. Registration was successful and we received a confirmation email.
BTCMarketz Regulation and safety of funds
The website is owned and operated by Nexter Ltd, a company registered in Dominica, an offshore Carribean jurisdiction that does not regulate investment or financial services. There is a physical address listed for them, but no phone number. What is more interesting is that in their Terms and Conditions we see another entity too.
Nexter Ltd did not return many results on the internet, so we suspect it is a newly formed entity. Lmost Identical s.r.o, however, is quite the opposite – we found more than five websites to be operated by this company, registered at the same address in Prague, the Czech Republic. All of these websites provide the same cryptocurrency trading services as BTCMarketz, and some of them look strikingly similar to it also.
The other thing we found out about Lmost Identical s.r.o is that the Comisión Nacional de Mercado de Valores (CNMV), Spain’s financial regulator of the securities markets has issued a warning that the entity is not authorized to provide investment services, including investment advice.
There are a number of proclamations aimed at making the potential investors feel safe about their money with this broker, for example “Your deposits or your unrealised profits, before withdrawal, always stay safe in the bank.” or what we see in the screenshot below:
Leaving aside the poor spelling and grammar, we want to note that this is far from the truth – if you want to invest in trading assets better choose a broker licensed by a respected regulatory organization such as the UK’s Financial Conduct Authority (FCA) or the Cyprus Securities and Exchange Commission (CySEC). These watchdog agencies have strict rules and policies that their licensees must adhere to. Brokers have to maintain Minimum Capital Requirements of 730,000 EUR in order to assure their good financial standing, and must participate in Compensation Schemes that provide additional guarantees to investors’ funds in case the broker goes bankrupt – up to 85,000 GBP in the UK and 20,000 EUR in the EU. Client Account Segregation and Negative Balance Protection also protect retail investors – the former stipulates that clients’ money must be kept separate from the broker’s operating funds, while the latter ensures that traders may not lose more than their initially invested funds.
Since BTCMarketz is not regulated by any financial oversight authority, all statements about security or safety of funds must be taken for what they really are – empty, unsubstantiated claims, and we would not advise investing funds with this broker.
BTCMarketz Trading Software
The broker offers some kind of web-based trading platform which is also oriented towards cryptocurrencies. It is a very basic software that does not have many features or even good design, but what is most important is that it has only cryptocurrency pairs, or stocks / indices / commodities versus cryptos available for trading. This is a sure sign that BTCMarketz is a shady brokerage.
Respectable forex brokers provide access to established trading software for their traders, such as the MetaTrader 4 (MT4) or MetaTrader 5 (MT5) platforms. MT4 is considered the world’s number one platform, preferred by over 80% of users. It offers an intuitive and user-friendly interface, advanced charting and analysis tools, as well as copy and auto-trade options. Its successor, MT5, has some advantages – it allows traders to execute trades on different financial markets through a single account and there is a hedging option. Both platforms are available as desktop and mobile (iOS and Android) applications as well.
BTCMarketz Trading Conditions
As we noted above this broker is focused on cryptocurrencies trading. A quick look at one cryptocurrency pair, ETH/BTC, shows a huge spread – more than 50 times what can be seen on one established live chart provider, such as TradingView. There is no question that such spread will not be advantageous to the traders, but will make huge profits for the broker.
The leverage BTCMarketz offers is also quite high – 1:400. Trading on leverage that big entails significant risks to inexperienced traders. Of course one can make big profits with leveraged trading, but in the event that you lose, your losses will be multiplied, and it may turn out you have lost much more than what you invested. For that reason most regulatory authorities impose leverage caps for non-professional traders: in the USA it is 1:50, while for brokers licensed in the EU and the UK it is 1:30. The Australian Securities and Investments Commission (ASIC) also recently announced that from 29 March 2021 it will restrict leverage for major currency pairs to 1:30.
BTCMarketz Deposit/Withdrawal Methods And Fees
At the bottom of the broker’s website can be seen multiple payment method logos, including Wire transfer, Credit/ Debit Cards, Skrill, Neteller, Yandex. Inside the platform, however, one can buy cryptocurrencies via Crypto Exchange, and the only methods available are Wire transfer and Credit card.
The minimum withdrawal amount is $50 while the processing time for withdrawal requests is 5 (five) business days. These are normal. We cannot find any information about commission or fees the broker charges, which basically means they can be very high – it is a standard practice of con artists not to reveal their true conditions, only to turn out later that there are hidden fees.
The bonus conditions the broker has are also not very favorable. Apart from the fact that regulated brokers do not offer bonuses or promotions, we see that “a precondition for making withdrawals after using the bonus/benefit is to buy options of 30 times the amount of the bonus/benefit plus the deposit amount”. This clause basically makes almost certain that the bonus cannot be used.
Overall, this broker is unregulated and does not offer an adequate trading platform. We would advise our readers NOT to invest their money with BTCMarketz!
How does the scam work?
Here we will outline the most common scamming scenario. The first step is to capture the users’ attention with ads promising fast money. When they click on such an ad, they are redirected to a website that would ask to provide their email address and phone number. This personal information is then used by the scam brokers who will start calling and asking to invest with them. The initial deposit is usually around $250 from which these brokers will make a fat commission.
After that, users are transferred to senior brokers. These are expert con-artists who will sweet-talk them into putting even more money. When the traders decide to get out, however, it turns out it is not that simple. The scammers will talk them into postponing their withdrawals or will draw out various reasons to deny the request. All of this is with the objective to miss the limited time period for filing a chargeback with their bank and get their money back.
We should note that VISA and MasterCard have recently taken measures to combat online scams and are classifying all forex transactions as high risk. Furthermore, they have increased the period for filing a chargeback from 6 months to 540 days.
What to do when scammed?
In the event you become a victim of such a scam there are some things you should know. If you used a major credit card to fund the account you should immediately file for a chargeback with your bank or credit card provider. In case you supplied sensitive financial information to the scammers, such as account details and passwords, you should cancel your credit card or change your pass.
If you used bitcoin or bank wire, however, chances of recovering your funds are slim. Do not get hooked by any “recovery agents”, who prey on scam victims, using their hopes of retrieving their money. These are just another type of scammers who will ask you for an upfront fee in order to get your money back, but once you pay them, you will not hear from them again.
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