farmerjohn1324
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I used to think it was illegal for a US citizen to use a Forex broker that is not registered with the CFTC and NFA. But I just read an article that says it's not illegal, but it's just that it opens you up to more potential dishonest business practices with less legal recourse if you get scammed.
https://www.forexfraud.com/unregulated-offshore-brokers/
Can anyone offer more information?
#1 Jan 7, 2022
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Ahmed Solaiman
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its not a illegal to trade with no register trading broker , its your own choice. so never think this is.
#2 Jan 7, 2022
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PeterNguyen
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it is not illegal to use a non-registered forex broker. However, without any regulations, your fund and yourself are at risk. If they scam you then there is nothing you can really do to get your money back. You can check tips to choose forex broker to help you make your own decision.
#3 Jan 7, 2022
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Andras
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It is not even possible to get money back from a regulated broker. The regulators are just there to fill their pockets, there is no value to us.
#4 Jan 7, 2022
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sebking1986
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That would be the ultimate slap in the face if they ultra restrict you as they have and then make it illegal to use workarounds. Regulation honestly is pointless in the US anyway. Your funds aren't protected and you're forced to use larger capital amounts to trade.
#5 Jan 7, 2022
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Swiss_cheese
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I'm sure the regulators would like to portray the image that it is illegal if it it's not. Scare tactics often keeps the sheep inside the pen and sitting underneath the big regulatory thumb.
#6 Jan 7, 2022
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chularm9
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Induced participation in activity, cannot be withdrawn
This currency trading platform operates bogus activities to induce clients to participate. After the client makes a profit, he says that he has to pay 20% of the tax and that the tax must be paid separately and cannot be deducted from the account. I already deposited all my money and I have no more to pay taxes. This regulation was not established before the activities. This is a fraud.
Synthesis, even though they are regulated there are companies that play by their rules, forgetting who they entrust their money to, a mystery on the rise
Find more valuable information regarding brokers in the following company.
https://www.wikifx.com/es/dealer/9941528702.htmlLast edited by a moderator: Jan 8, 2022
#7 Jan 8, 2022
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MACD
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Right
Not illegal
Just Stupid#8 Jan 8, 2022
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JSOP
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It's not that US citizens are not allowed to use non-registered foreign forex brokers. It's brokers that are not registered with the US CFTC and NFA are not allowed to take clients who are domiciled in the USA. The onus is actually on the broker, not on the client. If CFTC and NFA find out a broker that's not registered with them is taking US client, they reserve the right to prosecute that broker. This is why you will see a majority of foreign brokers will not take US clients, and ironically they are actually the more reputable ones because they actually abide by this regulation. It's the more "interesting" ones that are unregulated brokers offshore who don't care about the law and many times the client's interest who would take US clients' money.
I do agree with the article that this practice doesn't really protect US investors but instead protects US brokers because it actually cuts US investors off from the honest foreign brokers that would be potentially in competition with US brokers since the honest foreign brokers who are regulated would actually be put off from taking US clients and leave them open to the potentially seedy brokers who are not regulated and many times are not even legitimate forex brokers because they are the only ones who don't care about the law but just money. And like many have pointed out, since these brokers are unregulated and not overseen by anyone, then the investors who invest funds with them are at the complete mercy of these brokers. They can do whatever they want with the investors' funds and there would be no recourse for the investors who've given them money.
If CFTC and NFA really want to protect US investors and really feel US investors would benefit the most from US-registered brokers instead of foreign brokers, then it should ban the investing from the US investors' side and not go after the broker. But then again when has CFTC and NFA looked after the investors? They have always lived in the pockets of their FCM members who pay a huge hefty CFTC/NFA membership fee.
Last edited: Jan 9, 2022
#9 Jan 9, 2022
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Big AAPL
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Correct. However, it should be illegal to be that stupid.
#10 Jan 9, 2022
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FAQs
Is it illegal to use non-registered Forex broker? ›
it is not illegal to use a non-registered forex broker. However, without any regulations, your fund and yourself are at risk. If they scam you then there is nothing you can really do to get your money back. You can check tips to choose forex broker to help you make your own decision.
Are unregulated forex brokers illegal? ›It is important to note that being non-regulated does not needed mean that a FX-broker is illegal. The legitimacy of non-regulated FX-brokers depends on the jurisdiction in which they operate. Some jurisdictions may not have specific laws or adjustments that specifically regulated FX-brokers from operating.
Is it illegal for US residents to trade with offshore forex brokers? ›US citizens are allowed to trade on offshore brokers as long as these brokers are registered with the CFTC or fall under an exemption category. It's crucial for traders to ensure that the broker they choose is compliant with these regulations to avoid any potential legal issues.
Do Forex brokers have to be regulated? ›Yes, forex brokers are legal in the U.S., but they must be registered with and regulated by the Commodity Futures Trading Commission (CFTC) and be members of the National Futures Association (NFA). This ensures compliance with strict financial standards and offers protection to traders.
Which forex broker is legal in the US? ›| Broker | FX commission per lot | Minimum deposit |
|---|---|---|
| Forex.com | No commission is charged | $100 |
| Oanda | No commission is charged | $0 |
| IG | No commission is charged | $0 |
| Interactive Brokers | Trade value less than $1 billion: 0.2 bps * trade value; min. $2 | $0 |
Lack of regulation: Unregulated brokers are not subject to the same rules and oversight as regulated brokers. This means that they may not follow best practices or adhere to fair trading standards, which can put your money at risk.
Why is MT4 banned in the USA? ›The two MetaTrader apps were banned on Apple's App Store in 2022 for their alleged use by fraudsters targeting the US citizens and residents.
How can I legally trade forex in USA? ›Is forex trading legal in the United States? Yes, forex trading is legal in the U.S. and regulated by the Commodity Futures Trading Commission (CFTC). Forex brokers in the U.S. are required to register as Futures Commission Merchants (FCMs) and Forex Dealer Members (FDMs) with the CFTC and NFA.
Why can't US residents trade forex? ›The reason for this is quite simple - capital requirements. While a broker has to have around $100,000 - $500,000 of locked capital to obtain one of the European licenses, NFA requires quite an enormous amount of capital to be able to operate in the US - 20 million dollars.
Can US citizens use forex com? ›FOREX.com complies with a CFTC customer identification rule of the USA Patriot Act of 2001. This rule requires FOREX.com to put procedures in place to verify the identity of any person seeking to open an account and to maintain records of their information.
Is it illegal to trade with an unregulated broker? ›
It is ILLEGAL for any binary options broker to operate here in the States unless it submits to regulatory oversight by the US Commodity and Futures Trading Commission. A so-called brokerage that is not regulated by the CFTC cannot lawfully trade here, and you can't lawfully trade here with them either.
Are unregulated forex brokers safe? ›Even though unregulated forex brokers offer some advantages, they also come with risks that warrant serious consideration. Since these brokers operate with effectively no regulatory oversight, customers of unregulated forex brokers are more vulnerable to fraud.
Why do forex brokers not accept US clients? ›A lot of the damage in the US forex brokerage business environment came as a result of the $20million bond which was imposed as a requirement for starting a forex brokerage business in the US. Tax reporting requirements have also scared off many brokerages from accepting US clients.
How do I know if my forex broker is regulated? ›Visit FINRA BrokerCheck or call FINRA at (800) 289-9999. Or, visit the SEC's Investment Adviser Public Disclosure (IAPD) website. Also, contact your state securities regulator. Check SEC Action Lookup tool for formal actions that the SEC has brought against individuals.
Is Oanda regulated in the US? ›OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. OANDA CORPORATION IS A MEMBER OF NFA AND IS SUBJECT TO NFA'S REGULATORY OVERSIGHT AND EXAMINATIONS.
Can US traders use offshore brokers? ›Offshore brokers are online brokerage firms that offer trading services to clients worldwide. Since they are not regulated, they can offer services that are restricted in some jurisdictions. For example, they can offer Non-FIFO trading, CFD trading, and High leverage to US traders.
What is an unregulated forex broker? ›An unregulated Forex broker does not operate under the jurisdiction of any country's financial regulatory body, meaning they have no rules or regulations to follow when providing Forex services. Remember, Forex is an over-the-counter market, meaning transactions do not pass through a central exchange.
What is a non-regulated brokerage? ›Lack of Oversight: Unregulated brokers do not answer to any financial regulatory authority, which means there is no external body ensuring they adhere to fair practices, customer protection, or financial transparency.