How to check a broker's licenceNine steps, on the regulator's website rather than the broker's. The one that catches people out is the first: you are not checking a brand, you are checking a company, and the brand is usually several of them.Forex broker scams: the patterns that work
The convincing ones do not look fake. They have a real company name, a real licence number and a working platform - all of which can be copied from a firm that genuinely holds them.
Losing money trading is not a scam. Leveraged markets take money from people who were positioned wrongly, and most retail accounts lose - that is the industry working as designed, not fraud.
Fraud is different and it has a small number of recognisable shapes. Knowing those shapes is more useful than a long list of warning signs, because the sophisticated operations pass every superficial test you can think of.
The clone firm
This is the pattern most worth understanding, because it defeats the check almost everybody performs.
Suppose a genuine firm called Alpha Markets Ltd holds licence 987654 and operates at alphamarkets.com. A fraudulent operation builds a site at alpha-marketsfx.com, displays "Alpha Markets Ltd, licence 987654", copies the legal documents, and answers the phone using the same name.
The victim looks up the licence. It exists, it is current, the company name matches. What they did not do is compare the domain, email and telephone number against what the regulator's register lists, because a licence lookup does not obviously invite you to.
That is the entire trick, and it is why verification has to run from the register outward to the website, never from the website inward.
Verifying properly
Ten minutes, in this order. The order matters. Steps four and five are the ones that catch a clone.
Find the legal entity, not the brand
It will be in the website footer and the client agreement. "ExampleFX" is a trading name; you want the company that will hold your money, and its registration number.
Go to the regulator directly
Type the regulator's address yourself. Never follow a link from the broker's site, and never use a phone number from an email. If the regulator itself is unfamiliar, verify that it is a real financial authority. Sophisticated operations have invented regulators, complete with a searchable register they control.
Search the register for the entity
Confirm the authorisation exists, that it is current rather than lapsed or withdrawn, and that its permissions actually cover the activity being offered to you.
Compare the contact details
Website domain, email domain, telephone number, registered address. Against the register, not against the site. This is the step that exposes a clone, and it is the one that gets skipped.
Search for warnings
Regulators publish lists of firms they have warned about, frequently including cloned domains by name. Search the company name and the domain separately. They can be listed differently.
Read where the money goes
Before depositing, establish who legally receives it. A payment processor is normal. A named individual, an unrelated company or a personal crypto wallet is not.
What our records show about verification
Across the hundred brokers we hold, the raw material for this check is nearly always available, which means declining to do it is a choice.
- 98of 100 have a register entry we could linkVerification is a two-minute job for almost every broker in the market.
- 3are not regulated anywhereHankotrade, Trader's Way and Hugo's Way. Not fraudulent, but with no regulator behind them at all.
- 70hold a Tier 1 licenceThirteen are Tier 2, ten Tier 3. The tier is about the strength of the regime, not the honesty of the firm.
Unregulated is not a synonym for fraudulent. It does mean that if something goes wrong, there is no supervisor to complain to and no scheme to claim from.
The withdrawal wall
This is the pattern that extracts the most money, and it arrives after everything has been going well.
The account shows a healthy balance. Perhaps a small early withdrawal was even paid, which is a deliberate confidence-building move rather than evidence of legitimacy. Then a larger withdrawal is requested, and a fee appears that must be paid before the money can be released.
It will be called a tax, an insurance premium, an anti-money-laundering charge, a liquidity verification deposit, an international transfer fee. The label varies and the structure never does: send new money to release money you are already shown as having.
Paying it produces another fee. That is the design.
No legitimate firm requires a fresh deposit before it will return your existing balance.
Things that are not evidence
Each of these gets treated as reassurance and none of it is verification. All are straightforward to fabricate or purchase.
| What people rely on | Why it does not settle anything |
|---|---|
| A professional website | Design is cheap. Fraudulent sites are frequently better made than legitimate ones. |
| Live prices on the platform | Real market data is commercially available. The prices can be genuine while the balances are fiction. |
| Awards and badges | Frequently self-issued or bought. Ask who awarded it and whether that organisation exists. |
| Celebrity endorsement | Routinely fabricated, including with edited video. A recognisable face is not a reference. |
| A certificate of incorporation | Proves a company was registered. Registering a company and being licensed to handle client money are entirely different processes. |
| Positive reviews | Purchasable in volume. Negative reviews are also gameable in both directions. |
The signals that should stop you
One of these alone may have an innocent explanation. Two or three together do not.
- Guaranteed returns, or a track record with implausibly smooth monthly gains.
- Pressure to deposit before you have finished checking anything.
- A request for remote access to your computer, for any stated reason.
- Being coached on what to tell your bank, or encouraged to dismiss its fraud warnings.
- Payment instructions to a named individual, an unexplained company, or a personal crypto wallet.
- Being discouraged from withdrawing, or told withdrawing will damage your account.
- Any requirement to send new money before existing money is released.
- Encouragement to borrow, remortgage or use retirement savings to increase a deposit.
Common questions
Are forex brokers scams?
No. Brokerage is a legitimate regulated industry. Fraudsters use its vocabulary and imitate its firms, which is a different problem.
Can a fake broker use a real licence number?
Yes. This is the clone firm pattern and it is the most effective one in use.
How do I check a licence properly?
Search the regulator's own register for the legal entity, then compare the domain, email, phone and address on the register against the site contacting you.
Is company registration the same as regulation?
No. Anyone can register a company. Authorisation to hold client money and offer regulated products is an entirely separate process.
Should a broker ask for remote access to my computer?
No. Opening and funding an account never requires control of your device. Remote access exposes your banking, email and stored credentials.
Is crypto funding a warning sign?
Not by itself. Regulated firms accept it where permitted. It becomes a serious concern when it is the only option, when the wallet keeps changing, or when it is being used to route around your bank.
My broker says I must pay tax before withdrawing. Is that normal?
No. Tax obligations are settled with a tax authority, not paid to a broker to unlock a balance. Treat any upfront payment demanded to release your own money as fraudulent until independently proven otherwise.
Can scammers impersonate a regulator?
Yes, along with police, lawyers and insolvency administrators. Verify any such contact through details you find independently, never from the message itself.
Can my bank recover the money?
Sometimes, depending on the method and how quickly you act. Card payments may have dispute routes; bank transfers may be recallable; cryptocurrency transfers are usually not reversible. Speed matters more than anything else.
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Nothing here is financial advice. Leveraged products can lose more than they make.
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