Since 2015 when forex gained its popularity in the country, the amount of scammers has been rising. In forex we do not only see individuals but also more and brokers have sprung to life overnight. In most cases these companies do not register their company in South Africa due to tax and financial laws in SA therefore should they close their company they just leave you to financial loss. There‘s many ways a client can lose money to these brokers, failure to withdraw or they freeze the client’s account after they have made a deposit. In 2020 we experienced the worlds biggest crypto scam that was perpetrated in South Africa by Mirror Trading International, these people do not really trade but they just use Ponzi scheme. Hundreds of thousands were lost that totalled to US$500 million in crypto.
How can we avoid these scams？
· In forex trading it is of utmost importance that we are always careful about the brokers we trade and always do research before we even trust them with our hard earned money.
· We must make sure we are using registered companies in the country and with financial laws as well, license and regulations (FSB licensed for South Africa).
· Stay away from people/companies who promise you to trade for you, most of them they do not even have the licence to take peoples money as investments and others they do not know what they are doing.
· Avoid companies that promise you high returns, and also unreal opportunities
· Beware of unsolicited marketing. When is trying to sell you forex services with less information, most likely it will be a scam.
· If anyone is offering you 100% success rate, they are probably a scam. There is no guaranteed success in forex services.
· Distance yourself from “get rich quick mentality”.
· A lot of financial bodies are strict on Bid/Ask spread, but if a certain broker is not registered a trader can be a victim to unreal spreads and commissions leaving a trader with very less chances to make money. Distance yourself from those kind of brokers.
· Crypto mining is done by people who have very expensive and dedicated equipment not just anyone that promises you to mine your crypto, they probably use Ponzi scheme.
· Use legit wallet companies for crypto, with good reviews and trusted by many.
Is forex and crypto legit？
An answer is a big “Yes”. Crypto investing and forex trading is strongly legitimate and also legal, but you just have to know the risk involved, do not just follow the social media hype with a blind eye. Anyone can make serious money with crypto and forex trading.
As a youth we should try and prevent this from happening in our society, more especially to our old people. They want to provide for their kids and they would take any opportunity that sounds appealing to them. We are still a developing country so not everyone is educated with this new technology that is upgrading everyday.
Download this must have wikifx app to find out about more regulated and untrusted brokers in South Africa
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