EuropeFX Review 2021: An International History of Regulatory Issues

europefx

Over the past few years, EuropeFX has begun to build an international reputation. The broker is currently banned from operating within the UK. They have recently paid out a large settlement to their regulator, CySEC, for possible violations. In Australia, they are under investigation and have several court restraints against them. The broker’s unofficial reputation among former clients is also very negative, with many having issues with their account managers. The main thing to take away from this EuropeFX review is that they aren’t worth the trouble.

EuropeFX
Founded 2013
Headquarters Cyprus
Registrations CySEC
Platforms MT4, EuroTrader 2.0
Assets 190+

About EuropeFX

EuropeFX is an online forex and CFD broker. The company that operates this broker is Maxiflex LTD, which also operates the broker EuropeStocks. The company’s offices are in Limassol, Cyprus. Because every provider of financial services in Cyprus requires a license, the broker has registered with CySEC, the financial regulator of Cyprus. Despite maintaining their license with CySEC, the broker has had a lot of trouble with multiple regulators over the years.

The Broker’s Reputation Among Former Clients

EuropeFX has been open for business for years. In that time, they have accrued many former clients who are displeased with their interactions with the broker. Our EuropeFX review found numerous examples of distraught clients. Some of the most common EuropeFX complaints are excessive calls from representatives. Traders with the broker have said that the calls are practically constant, always encouraging them to deposit more money and make more trades.

Furthermore, there are numerous allegations from former clients of much more serious violations. Many of the past client’s reviews claim that they receive calls from organizations that they believe EuropeFX to have shared their information with. These reviews all implore their readers to stay away from the broker, citing their personal experiences with the broker’s reported lack of confidentiality.

Second Wave of FCA Bans

Following an initial wave of bans from the UK’s FCA, the broker lost its authorization to offer financial services within the UK on June 15th, 2020. This new ban includes Maxiflex Ltd, the parent company of EuropeFX, Maxigrid Limited, and Reliantco Investments Ltd.

The spat between CySEC registered brokers and the FCA began two weeks earlier, on June 1st, 2020. The FCA took the unprecedented action of removing the passporting rights of four Cyprus Investment Firms. The four firms were Hoch Capital Ltd, Rodeler Ltd, F1 Markets Ltd, and Magnum FX Ltd. The ban stemmed from an elaborate advertisement scheme involving the use of fake celebrity endorsements. Once the FCA uncovered these practices, they swiftly banned all the brokers involved.

In addition to the FCA ban, the four initial companies also faced a suspension from CySEC. This temporary suspension was set at one month. During the suspension, the brokers could not offer financial services or advertise themselves. CySEC set several conditions that the brokers would have to meet to recover their licenses. Two of the brokers, F1 Markets Ltd and Magnum FX Ltd, met these terms now have their licenses once more. However, the other two, Rodeler Ltd and Hoch Capital Ltd, refused to implement the proposed changes. As a result, these two companies have lost their CySEC licenses permanently.

These cases set a precedent for the FCA to rescind the rights of Cypriot brokers to offer their services within the UK. Complications between the three brokers involved, CySEC, and the FCA, led to the companies voluntarily giving up their passporting rights. As such, many of the details of the reasons behind the decisions made are still behind closed doors. By giving up their rights voluntarily rather than waiting for a ban from the FCA, the three companies have avoided the disclosure that would have come with the FCA’s action.

EuropeFX Review 2021

Major Settlement for CySEC Violations

Several months later, in December of 2020, CySEC and EuropeFX reached a settlement of €370,000. The broker was required to pay the regulator this fine because of violations against the Investment Services and Activities and Regulated Markets Law.

The statement that CySEC released on the reasoning behind the fine cited several articles of that law which the broker committed possible violations of. These articles included Article 22, which covers organizational requirements for Cyprus Investment Firms. There are very specific requirements for the structure of such an organization in order to avoid internal conflicts of interest.

Furthermore, another possible violation from EuropeFX was Article 24. This is the specific article that handles conflicts of interest. Combined with their possible violation of Article 28, the article that obliges a broker to execute orders on the most favorable terms for the client, it seems as if the broker might have been passing off investment advice that was in their favor rather than their clients’.

In addition to their conflict of interest issues, EuropeFX also possibly violated Articles 25 and 26. These articles protect retail investors. The first guarantees the appropriate distribution of information to clients. Secondly, Article 26 ensures that brokers assess the suitability of assets to specific clients because not all assets are suitable for novice traders. The possible violation of these articles cited by CySEC shows that EuropeFX might not be operating with the transparency that it should be.

Ongoing Investigation by ASIC

EuropeFX has attracted the attention of an investigation by the Australian regulator ASIC. In December of 2019, the regulator put out federal court orders to protect customers during an investigation into the broker. For example, the order required EuropeFX to separate a certain amount of their operational funds during the investigation. Furthermore, the court-imposed travel restrictions against some of the broker’s key personnel. Later, in February 2020, the court ordered EuropeFX to provide information that would substantiate their stated expenses. EuropeFX has not complied with that order, despite further court appearances reiterating that demand.


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Available Account Types

EuropeFX trading is available through a variety of different account types. The broker advertises that their minimum deposit is $200. However, their lowest listed account type, Bronze, has a listed minimum deposit of $1,000. It seems that the broker also offers accounts without any designation and that Bronze is simply the first VIP level they offer. Further accounts include Silver, Gold, Platinum, and Premium. The minimum deposit climbs sharply with each level, with the Platinum EuropeFX account requiring $50,000.

Bronze members will receive the broker’s trading newsletter along with the advanced trading signal, but only for a limited time. The membership also includes a limited trial of the dedicated account managers that the broker offers. These are likely the representatives that some former clients complained about, always driving them to increase their EuropeFX investment.

The Silver account makes access to the account representative permanent. Upgrading to the Gold account will then give access to exclusive events and SMS trading signals. Furthermore, Gold members have access to trading tools that allow them to copy successful traders’ trades on the platform. These copycat tools are often dangerous gimmicks that do more harm than good. The Platinum account has everything the Gold has, with additional discounts on trading costs.

In addition to their traditional account structure, the broker also has volume-based VIP bonuses. The three ranks within their program, Diamond, Elite, and Prestige, are based on the total volume of trades that the trader has completed. Perks include one on one sessions with their trading advisors and better spreads and fees.

Assets and Spreads

Our EuropeFX review found the broker to have over 190 total assets. There are over 50 currency pairs with the broker. Furthermore, some of their forex options are uncommon and difficult to find elsewhere. Their CFD options include a variety of over 120 stocks and indices. The broker only has the stock cryptocurrency CFDs and minimal commodity offerings.

The broker advertises their spreads to be as low as 0.1 pips. While the spreads sometimes do graze that mark, there are commissions to make up the difference. Some traders prefer trading this way and can use their trading knowledge to exploit it to their advantage. Overall, the trading costs tend to level out for either method.

Their Trading Platforms

Of course, this broker offers the popular MetaTrader 4 platform. However, they also have two additional offerings. The broker has a browser platform that they call EuroTrader 2.0. In addition to this, they include a unique mobile app called eFXGO! MetaTrader 4 is easily the best option here. It has all the tools and charts that any trader could want. Its widespread use allows traders to become very familiar with its layout and features. MetaTrader 4 also has its own mobile app, with more features than eFXGO!

The browser platform EuroTrader 2.0 is easy enough to use but lacks many of the features of MetaTrader 4. Users will be disappointed by the lack of technical indicators and charting tools. Like many other browser platforms, EuroTrader 2.0 falls into the trap of oversimplifying at the cost of functionality.

Client Support Options

The broker provides several methods for clients to contact them. They have phone numbers for their several offices. They also have a form to request a callback or email from the broker. In addition to these standard options, they also provide customer support through WhatsApp, Viber, and Telegram.

Withdrawals and Fees

The broker has an above-average selection of ways to fund trading accounts. The standard wire transfers, credit cards, and debit cards all work. In addition to these, the broker accepts many of the popular, and even some obscure, online payment processors. Traders can withdraw funds through the same method they fund their account with, with withdrawals taking 1 to 3 business days.

Like with many other brokers, our EuropeFX review found numerous additional fees that traders should know about. The inactivity fee at the broker isn’t as bad as it could be at $50 after three months of inactivity, but it is still an unnecessary expense for traders. There is also a $20 withdrawal fee on each withdrawal.

Educational Resources

The broker has a full suite of educational resources for their clients. The standard fare is all there, trading glossary, economic calendar, and market news. Certain accounts also give access to daily webinars and other video content that the broker produces. Registered traders can also access three eBooks from the broker that cover CFD and forex trading.

Key Points of Our EuropeFX Review

It’s rare to find a broker that has run into problems with such a wide variety of financial regulators. Their trouble with the FCA would be reason enough to steer clear. The investigation in Australia and trouble with CySEC should seal the deal for any traders considering this broker. The high deposits required to move up the account levels to get better spreads also discourage traders from choosing this broker.

Don’t Hesitate to Fight Back for Your Money

Brokers can go for years before regulators start to catch up with them. If you’re trading with a broker right now that you suspect isn’t dealing fairly, you should get your money out now. When brokers refuse your request, you can contact us today to leverage a chargeback strategy to recover your lost funds. Our team’s extensive experience can navigate any broker chargeback case.

Can I Trade With This Broker from the UK?

No, this broker has lost its right to offer financial services to residents of the UK. Any services they provide or advertising of their services there are illegal.

Have They Resolved Their Dispute in Australia?

No, the broker still has not complied with information requests, despite numerous court appearances and reiterations of the initial request.

How Do I Enroll for Their VIP Perks?

The broker doles out VIP perks based on total trade volume instead of minimum deposits like most other brokers. The range for VIP perks goes from the low hundreds of thousands up to over a million.

Can I Trade CFDs on the Latest Cryptocurrencies Here?

No, the broker's selection of cryptocurrency CFD options includes only the most basic and well-known cryptocurrencies.