The extreme price volatility found in the crypto markets continues to attract hordes of investors. Across the world, there are still people looking to “buy a bit of crypto”. The market conditions aren’t for everybody, and risk management is the key to success. Remembering the term “only invest in amounts you can afford to lose entirely” remains paramount. Not least because being able to take the emotion out of trading is one way of holding a position until it comes good.
As the crypto market attracts many for whom it is their first experience of online trading, one often asked question is, how do I find a safe broker? It’s a valid question, and probably the most important, as there are, unfortunately, scammers operating in the sector. Hooking up with a scam broker leaves you open to losing your entire funds. There’s no feeling worse than getting your trading decisions spot-on, registering a paper profit, but on trying to reclaim your cash, finding not only the gains but also the initial cash stake are both gone forever.
FCA and Barclays Clamp Down on Binance
This makes recent events surrounding Binance essential reading. Trade volumes on the exchange were $662bn in June. That makes the platform one of the biggest exchanges operating in the sector and one that many might consider using; however, some surprising developments might lead potential investors to question that idea.
- 26thJune – Financial Conduct Authority (FCA) – the UK’s Tier-1 and globally recognised regulatory authority announced that “Binance Markets Limited is not permitted to undertake any regulated activity in the UK. This firm is part of a wider Group (Binance Group).”
- 5th July – Barclays Bank announces that to keep client money “safe”, it was no longer supporting deposits from UK Barclays accounts to Binance
- Regulators in other markets, including Japan and Canada, have offered similar warnings. The Thailand authorities are threatening criminal charges.
Binance – What is Going on?
The low score on consumer review site Trustpilot gives one clue to why a major UK bank has stepped in to prevent its customers from transferring funds to Binance.
The comments from the most recent reviews include these end-user experiences.
“I’m unable to withdraw cryptocurrency from my account. I’ve contacted their support but got nowhere. More likely they’re going bankrupt so please take all your money while you can and spread the word.” Source: Trustpilot
So Where Can You Find a Good Crypto Broker
The good news is that trading crypto doesn’t need to be so problematic. Market risk is unavoidable, price moves can wipe traders out in a matter of moments, but some regulated brokers offer markets to UK customers. eToro, for example, is fully regulated by the FCA (Binance isn’t), so it has invested heavily in internal protocols designed to protect clients. As crypto assets aren’t a regulated product, the extent of the coverage is not as great as if eToro clients were trading regulated equities. But at least regulated brokers which offer crypto markets engage in a debate as to whether the coverage is half-full or half-empty when many out-and-out crypto exchanges offer no regulatory cover at all.
If you want to know more about this topic or have been scammed by a fraudulent broker, please contact us at [email protected]
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