CYSEC has announced that it has suspended the activities of Hoch Capital Ltd, the parent company of iTrader. The company had been operating on a global scale while bearing the official designation of a Cyprus firm in an attempt to evade stringent investor protections.
Their attempt has failed, as both Cyprus and the UK have banned the company from carrying out any investment activities.
iTrader has recently faced catastrophic problems with financial regulators, culminating in their abandoning their CySEC license. They now operate as an unregulated broker with mediocre offerings.
They also don’t have much to offer in terms of asset selection or spreads that could justify trading with a broker that has had this much trouble with regulators.
|Regulation and License||No Regulation / Scam Broker|
|Trading Assets||250+ Assets / Forex / Commodities / Stocks / Cryptos|
What Is iTrader? – Let’s See
Online forex and CFD broker iTrader is part of the parent company Hoch Capital Ltd, alongside the broker TradeATF. The company operates out of offices in Limassol, Cyprus. They once held CySEC license number 198/13.
However, a series of issues with both CySEC and the FCA led to the company renouncing its license and abandoning its CySEC registration. They are now an unregulated broker and also do not have any authorization to provide financial services within the European Union.
What Former Clients Say About iTrader
Our iTrader review found a long history of unsatisfied clients with this broker. Some of the negative reviews online say that they have received unsolicited calls from the broker asking them to set up an account.
Those that have set up trading accounts with the broker say that their account managers are very aggressive, frequently calling to pressure traders to make more trades and deposit more funds.
Former clients also complain of unexpected fees from the broker, with certain withdrawals incurring a fee of up to $50. There are also many account holders deeply upset by the broker’s use of fake celebrity endorsements to bring them in.
These phony social media advertisements promised huge returns on their investments, but the traders had a very negative trading experience. The popular review portal Trustpilot has nearly 300 reviews averaging just 2 out of five stars, a clear indicator that this broker’s broad experience has left clients wanting.
FCA Cypriot Broker Crackdown on iTrader
June 1st, 2020, saw the beginning of a chain of events that led to Hoch Capital Ltd renouncing its CySEC license. The company and also its two brokers, iTrader and TradeATF, were among the four Cypriot investment service providers that the FCA banned from operating in the UK.
The other organizations included Rodeler Ltd, Magnum FX Ltd, and also F1 Markets Ltd. This ban remains in effect to this day.
The FCA found that all of these companies were advertising their services to UK residents using illegitimate means. They circulated advertisements on social media featuring falsified celebrity endorsements.
As a result, the FCA came down on the companies swiftly and harshly with a complete ban, revoking the passporting rights that had allowed the CySEC licensed brokers to offer services there. The UK regulator believes that fraudulent advertisements may have led UK investors to lose hundreds of thousands of pounds.
This ban set a precedent, no financial regulator within the EU had ever rescinded passporting rights before this. European Economic Area agreements allow for brokers registered with a financial regulator in one country to offer services to all countries within the agreement.
The FCA ban was the first to take action against specific brokers from another financial regulator. The FCA has since banned more CySEC registered brokers.
CySEC Suspends iTrader’s Activities
iTrader’s downward spiral continued that same day, with CySEC issuing a partial suspension against the broker. All four companies involved in the UK ban received similar suspensions, which would expire after one month if the broker could implement corrective actions to the regulator’s satisfaction.
Their statement cited several violations from the brokers. CySEC claimed that the brokers did not appear to act honestly, fairly, and professionally when providing investment services to clients.
Their statement further read that the brokers did not appear to assess financial instruments’ compatibility with their clients’ needs, likely referring to CFDs offered to novice traders.
CySEC released an official statement on the suspensions’ matter, citing the specific articles that motivated their decision. The brokers in question did not meet their criteria for fair, honest, and professional investment services.
The statement further cited a provision on assessing the suitability of individual financial instruments for specific clients. This was likely about iTrader’s and the other brokers’ reported marketing of complex CFDs to amateur traders.
The suspension reinforced that the brokers do not have the authorization to provide financial services to any UK residents. For the month of the suspension, the broker would be unable to take on any new clients.
They were also unable to run any advertisements for their investment services.
iTrader Refuses to Implement Corrective Actions
What Happened Next?
On June 18th, CySEC announced that two of the four companies, Magnum FX Ltd and F1Markets Ltd, had successfully implemented their required corrective measures. The regulator removed the suspension on these two, allowing them to provide investment services once again.
The other two companies, Rodeler Ltd and iTrader parent company Hoch Capital Ltd, did not implement corrective measures. Instead, both companies renounced their CySEC authorization licenses.
During the board meeting on July 6th, 2020, CySEC approved the broker’s request to renounce their Cyprus Investment Firm authorization. Rather than implement the changes necessary to meet CySEC regulations, the broker decided to abandon their CySEC registration.
Without this registration, the broker now has no authorization to offer financial services within Cyprus or the wider European Economic Area.
CySEC and iTrader Reach Exit Settlement
On December 11th, 2020, the financial regulator announced that they had settled with Hoch Capital Ltd during the previous month. The total settlement was for €260,000.
Their official decision read that the settlement followed the company’s voluntary renunciation of their authorization and was for possible violations of the Investment Services and Activities and Regulated Markets law of 2017. The possible violations occurred during the period from January 2018 to April 2020.
CySEC cited several specific articles of the law for the settlement that pertained to the requirements for Cyprus Investment Firm authorization. Their investigation into Hoch Capital Ltd and iTrader brought up issues regarding management, governance arrangements, organizational needs, and record keeping.
They also invoked articles regarding conflicts of interest. Finally, the regulator cited an article regarding the broker’s obligation to submit correct, complete, and accurate information.
Our iTrader review shows that the broker and its parent company have run afoul of many of CySEC’s regulations in the past few years and that this has finally caught up with them. The broker paid the €260,000 settlement in full.
CySEC still lists the broker as “under examination for voluntary renunciation of the authorization.”
Extended History of Regulatory Issues
Even before their FCA ban, the broker had faced corrective actions from CySEC. In February 2018, they received a fine of €30,000 from their regulator for non-compliance with a directive on the professional competence of investment firms.
In March 2019, they reached a settlement of €200,000 with CySEC for possible violations regarding investment activities’ performance and the disclosure of information to clients.
These fines led to the Italian regulator, CONSOB, blocking access to Hoch Capital’s brokers iTrader and TradeATF from within the country.
Today, the prohibition remains in effect, with their statement reading that it will stay in place until they believe Hoch Capital has amended the issues raised by Italian consumers in complaints to the regulator.
Given how much the broker’s status has degraded since that time, it seems unlikely that they will ever reinstate access.
Trading With iTrader
This broker has three account types:
Traders looking to open a Silver account will need a $250 minimum initial deposit. The biggest draw for the higher account types is improved spreads.
Their Silver spreads are completely unviable for any trader. The EUR/USD currency pair is the best indicator for a broker’s spreads in general. With a Silver account, the EUR/USD spread is 2.2 pips, which is absurdly high.
With a Platinum account, the spread comes down to 0.7 pips. This is very competitive, but it comes at the cost of putting down a massive initial deposit.
Assets With iTrader Broker
This iTrader review found that the broker has an above-average selection for most assets. The CFD selection covers more commodities than many other brokers and fares well on indices. CFDs on stocks are underrepresented with this broker but would satisfy most traders.
Their selection of CFDs on cryptocurrencies is also impressive. Alongside their 50 currency pairs, the broker has over 250 available assets in total.
During their time as a CySEC registered broker, the broker had to abide by the ESMA mandated leverage limit, which is 1:30 for retail traders. Although they no longer have their registration and are not bound by ESMA regulations, they still appear to keep leverage within the limit.
The broker also offers professional leverage of up to 1:500. However, it is unclear what their criteria for professional accounts are now that they are unregulated.
iTrader Trading Platforms
Trading with the broker is through the MetaTrader 4 platform. This is the same platform that countless other online forex and CFD brokers use. Most traders are familiar with its suite of features, including some of the best technical indicators around and a host of advanced tools for experienced traders.
The platform also features a library of premium automated trading tools, some free and some that come at an additional cost. Traders from all around the world can make use of this platform, with multiple languages available.
The broker also offers a mobile app for iOS and Android devices. The reception of this app has been mostly hostile, with most reviews criticizing the lack of features.
Our review found the app to be far too simple for most traders, placing too high a priority on ease of use over practical trading functionality.
This broker only has customer support during their business hours, 7:00 am to 7:00 pm Greenwich Mean Time. This presents a problem for traders from other countries that might have different schedules.
They provide customer support through phone and also email. This broker hasn’t shown a strong commitment to making customer contact easy.
Deposit and Withdrawal Policies
The broker takes payments in multiple currencies, including USD, GBP, and also EUR, despite not having the authorization to provide services in the countries that use those currencies.
Traders can fund their accounts through credit and debit cards, bank wire transfers. This broker doesn’t accept any of the popular e-wallets that many traders use.
Many former clients complained of withdrawal delays, and the broker themselves say that withdrawals can take up to seven working days, significantly longer than with comparable brokers.
Our iTrader Review Summary
In conclusion, our iTrader review has highlighted this broker’s major operational issues. Their longstanding lack of transparency and inability to commit to their traders’ best interests has taken iTrader from a CySEC registered broker to just another unregulated broker with no accountability.
Their FCA ban and renouncing their CySEC license should be reason enough for any potential client to avoid this broker. Even if a trader were to consider what this broker has to offer, there’s nothing to make them stand out from other unregulated brokers.
Initiate the Chargeback Process With Us Today
The move to withdraw from their CySEC registration instead of meeting regulatory requirements shows that some brokers just aren’t out for their clients’ best interests.
If you believe that your broker has wronged you and you want your deposit back, our dedicated team of professionals can help you now. Just contact us today to start your free consultation.
We can quickly determine if your case can lead to a refund and start the chargeback process to get your money back.
Has iTrader Met CySEC's Terms to Remove Suspension?
No, iTrader broker has instead renounced their CySEC license.
Can I Trade With iTrader as an EU Resident?
iTrader no longer has any authorization to offer financial services within the EU.
Can I Trade With iTrader as a UK Resident?
Not really, the FCA has specifically banned this broker from offering their services within the UK.
Do All of Their Accounts Offer Competitive Spreads?
No, their entry-level accounts have unviable spreads. Only their premium accounts offer worthwhile spreads.