In forex trading, scamming practices are often carried by the brokers. That is why as a trader, you must know which broker that must be avoided to minimize the risk of being scammed.

With more than $6.6 trillion a day traded over the market, forex industry is prone to frauds and scams. The sad reality of it that people are out to make fraudulent money from innocent traders through many actions. If you look up forex scams on the internet, the results might be shocking.

Usually, the victims are beginners who are not fully prepared and can't identify the right broker to choose from. Of course, scam acts are not limited to beginners because even a professional trader can get caught in similar cases if they're not careful. Like what happened with these brokers:

  1. 4XP Broker: FPA declared 4XP as a scam and blacklisted it
  2. SkyFx: After its owner was involved in illegal activities, CySEC no longer regulates SkyFX
  3. Forex-Metal: FPA confirmed the company as a scam after clients complained of withdrawal failure
  4. Masterforex (MFX Broker): Following suspicious investment, IFSC Belize announced that they had revoked MFX's license
  5. IronFX: In 2015, CySEC confirmed the broker for scams, but has not yet revoked its license

It is wise to keep yourself fully informed about the broker you choose and avoid the ones that don't meet the safety requirements. For more stories regarding those brokers, let's take a look below.


1. 4XP Broker or Forex Place

4XP has been aggressively promoting its services and pushing on vigorous marketing strategies to gain more clients from the start. The broker claimed that they were regulated in the British Virgin Island in 2009 and were a part of the Russian independent regulatory agency, Financial Market Relations Regulation Center (FMRRC).

Not only that, 4XP mentioned that they were processing their applications for licenses from the Financial Conduct Authority (FCA)  in the UK and Australian Securities and Investments Commission (ASIC).

4XP offered desirable trading conditions such as zero commission, tight spreads, and real-time market prices. They claimed that they had developed robust connections with various inter banks and, therefore, could provide the best competitive rates for their clients. The website was regularly updated with unique, daily, and weekly market commentaries and up-to-date economic calendar releases.

However, on December 11, 2013, 4XP was included in a warning against a few unauthorized entities issued by the French AMF. Not only that, FMRRC also declared that they have revoked the license for 4XP and stated that 4XP was never regulated there.

And then, in the following year, there were 7 Guilty Verdicts against 4XP in the Forex Peace Army (FPA) Trader's Court. Many traders were complaining about not being able to withdraw their funds and some other financial issues. As a result, the FPA declared 4XP as a scam and blacklisted it. 4XP eventually deactivated its website in 2014 and has stopped operations ever since.

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2. SkyFX

SkyFX was first established in 2011 and has gained quite a handful of worldwide traders since then. The parent company, Trademarket Ltd, has obtained authorization from Cyprus Securities and Exchange Commission (CySEC). At a glance, the broker seems safe and well-regulated.

However, it was later found out that the broker got into trouble with IBs and their affiliates because of multiple changes in URL and affiliation code that happened without any logical reason. As a result, many IBs and affiliates decided to stop partnering with SkyFX.

The issue didn't stop there. In April 2016, the CySEC fined Trademarket Ltd a fine of €20,000 for violations of the Investment Services and Activities and Regulated Markets Law of 2007.

Not only that, many articles from the Israeli press wrote that the owner of the company, Aviv Talmor, was involved in illegal actions and was under investigation for operating a Ponzi scheme. CySEC then announced that they would be no longer regulating SkyFX. Shortly after, the broker ceased their operations completely and took down their website.

See also: List of Forex Brokers Regulated by CySEC


3. Forex-Metal

Forex-Metal is a Bulgarian-based broker founded in 2007. Initially, Forex-Metal seemed like a fine choice for traders because it offered some benefits and favorable trading conditions.

However, in 2014, traders began to experience withdrawal failures. As you may already know, withdrawal failure is one of the earliest signs of scams, in which some of them end up taking their clients' funds and disappear into thin air. Not only withdrawal failures, Forex-Metal's clients also experienced downturns in the trading platforms and the website.

Since the beginning, Forex-Metal had tried to gain clients' trust by claiming that they were licensed by the International Financial Services Commission (IFSC), a regulatory agency from Belize. Yet, the license couldn't be proven anywhere. In 2016, the FPA finally stated that Forex-Metal is a confirmed scam broker and must be avoided.

Not long after, the website had gone offline. Although the broker officially stopped their operations, there are a few suspicious websites still operating under the Forex-Metal label and have the same address in Malta.

See also: List of Forex Brokers in Malta


4. Masterforex (MFX Broker)

MFX Broker was founded in 2006 under the name Masterforex and licensed by the IFSC Belize, but later rebranded as MFX Broker without renewing its license. In the following years after the launch, MFX gained popularity among traders from across the world.

However, since they rebranded, the company started to look suspicious. Starting from the status of their license that remained "on process" to their unrealistic investment program in 2015 that promised a fixed return ranging from 3% per month and up to 100% per year.

A year later, this broker's issues grew bigger with traders and IBs left unpaid, and IFSC Belize announced that they had revoked MFX's license. Not only that, but some traders also experienced withdrawal failures, and many finally accused MFX of scam practices.

The FPA strongly suggests not trading with MFX broker as it is already proven to be a scam and problematic. Currently, the broker's official website has been taken down and the company has stopped its business.

See Also: List of Forex Brokers Regulated by IFSC Belize


5. A Special Story from a Surviving Suspect

Many traders from around 2013-2014 might have heard the name IronFX thanks to its bombastic and unmitigated promotional activities, including offering a trip to outer space and a luxurious holiday in Dubai. Many traders were interested in this offer, especially with the broker's credibility which was supported by licenses from CySEC (Cyprus), FCA (UK), and ASIC (Australia).

But in early 2015, many complaints emerged from traders across various countries regarding the difficulty in fund withdrawals.

The fact that several top-tier agencies regulate IronFX confused most traders.

Responding to the complaints, in August 2015, IronFX stated that they indeed intentionally held the withdrawal process of their clients because they were performing an investigation for the misuse of promotion bonuses. In fact, many clients that experienced withdrawal failures were not even involved in any promotional activities.

Regarding the issue, CySEC decided to investigate and end up charging the broker for being proven guilty. Still, IronFX's license was not revoked. At the same time, rumors circulated that the fine only functioned as a settlement to keep CySEC from canceling its license.

IronFX tried to gain its reputation back, especially in the UK and Australia, by changing the name of their subsidiary as FXGiants. It appears that a few years later, as written in the Financemagnates news on August 6, 2018, CySEC stated that the allegations aimed at IronFX did not have strong evidence and IronFX has the right to withhold traders' funds if there's an indication of fraud and abuse in the bonus system.

In addition, traders who claim to have suffered losses have also retracted their lawsuit against the broker simultaneously. Although it is still unclear if the broker's a real scam or just the victim of witch-hunting, it is important to note that even now, many traders still complain about withdrawal issues, and the broker still struggles to recover from its scandals and have not managed to return to its previous glory.


3 Skills to Avoid Scams

There are at least three skills that you need to have to avoid scams:

  1. First, you must be able to identify a regulated broker authorized by a trusted regulator. It is essential to check this aspect at the start because if the broker's not regulated to begin with, then there is a higher chance of low-quality services that lead to financial loss.
  2. Second, you should be realistic while scanning through any broker's promotions and bonuses. Scammers tend to over-promising by offering unrealistic deals to get more clients.
  3. Lastly, you need to understand how forex broker scams usually cheat on their clients. You will get to know their characteristics and, therefore, avoid them as best as you can.



Choosing a forex broker is never an easy task for traders. Having to trade with a problematic broker can affect a trader's performance and add unnecessary anxiety. The sad truth is that despite the many attempts to get rid of them, scam practices are still standing in the forex industry.

However, keep in mind that not all brokers are bad. There are plenty of other trustworthy brokers that put a high priority on the traders' interests. As long as the broker is well-regulated and transparent to its clients, then you're good to go. Also, try to avoid brokers that have a bad reputation and bad track records.

Lessons from the five stories above could give you a clear insight into how forex scams usually unfold. If you are already trapped in a suspicious broker, experiencing some serious withdrawal failures or other issues, you should learn How to Deal with Problematic Brokers in 6 Easy Steps.