Beware! BaronsVC is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
At first glance, the interface of BaronsVC looks good enough to start considering trading with this broker. And then, the more you keep looking, the more you find reasons not to.
BaronsVC Regulation and safety of funds
There are so many things that are wrong with the legitimacy of this broker that we don’t know where to start from. First, in the Terms and Conditions document, we find out that the site is owned and operated by Atlantis Technology Group Ltd with registration and address in Marshall Islands. However, what you should know about this offshore zone is that there is no financial regulator which makes this broker not reliable to trade with. The implications are that you might be dealing with a scammer and if they decide to shut down the site, your funds will be gone down the drain!
What we find also confusing is that in the footer of the website, you see that the registration address is in Estonia and the operational address is in Ireland. Sorry, we had to take you on a tour around the globe. We hope you paid attention to those geography classes! Joke apart, you should know that the Austrian Financial Market Authority (FMA) has issued a warning that this broker is not licensed and is not authorised to conduct business in Austria (screenshot below). Non-licensed brokers, such as BaronsVC, should be avoided at all cost as the probability of dealing with scammers is quite high.
If you are wondering how to find a licensed broker that won’t fleece you, we can help by recommending that you look at brokers from the well-established jurisdictions where regulating authorities set high requirements for forex brokers in order to provide a wall against scammers and a guarantee for the safety of clients’ funds. In our opinion, the best conditions that can possibly be offered to forex traders exist in the jurisdictions of the EU and the UK. In those jurisdictions, to get a license, forex brokers must have an initial capital of no less than 730,000 EUR which among other things serves as a preventive measure against scammers. You can’t imagine scammers investing so much money just to look legit, can you? In addition to that, licensed brokers must contribute a local compensation fund or scheme from which their clients can be compensated in case the broker goes belly up. Forex brokers regulated by CySec contribute to a local Investor Compensation Fund and in case of bankruptcy, the clients will be compensated by up to 20,000 EUR per person. In the UK, the compensation amount is even higher and brokers regulated by FCA and who contribute to the local Financial Services Compensation Scheme will be refunded up to 85,000 GBP per person.
You can also look up brokers in the US and Australia where high capitalisation serves as a wall against scammers and brokers must have an initial capital of $20 million and 1 million AUD respectively.
BaronsVC Trading software
BaronsVC is a forex broker trading in stocks, indices, forex, cryptocurrencies, metals and CFDs. From the company’s website, we can see that the trading software consists of MetaTrader 4. However, when we opened a trading account, we found out that in addition to MT4, the broker offers also Sirix trading platform which we downloaded. On the platform’s interface, you can see on the left the trading instruments which in this case are in forex currencies. In the middle of the screen, we see the chart of one of the major forex currencies, EUR/USD, with the fluctuation in price in a given time frame. With the sell and buy buttons that you see above the chart, traders can do transactions and the can choose from pending orders or orders for immediate execution. On top of the screen, you can see the button for making deposits. However, the link is broken and we could not find out what the deposit methods are. In the far right, there is the social trading option which consists of mirroring traders who allegedly have a lot of successful experience in transactions.
From the ask/bid price for the EUR/USD currency pair, we could calculate the spread to be 3 pips. We must say that a spread above 2 pips is considered to be high which increases the cost of trading and makes it difficult for traders to achieve sustainable profit in the long run. Also, as per our calculations, the leverage happens to be also very high – 1:500. High leverage can signify only two things – a big win or big loss! Traders may get tempted with the promise of a big win but actually, this is a trap in which many unsuspecting traders may fall. Why? Because statistically, around 70% of traders experience financial loss in transactions and the probability of losing funds is higher than gaining them. You must know that it is not by chance that in the EU and the UK there is a cap on leverage which cannot exceed 1:30. This is put in place to prevent enthusiastic traders from undertaking risky transactions and losing too much money. In the US, the cap on leverage is 1:50 and in Australia, soon, March 2021, a cap on leverage which will not exceed 1:30 for major currencies will be in place. In the high leverage offered by BaronsVC, we find another proof that this broker is not reliable.
The other trading platform which we could not download due to broken links is MetaTrader 4. This platform is one of the best in the forex trading world and around 80% of the forex brokers swear by it or its younger brother MetaTrader 5. MT4 comes with an excellent package of trading tools and instruments, including auto trading option, VPS, code base wit customs scripts, trading signals, an app market, etc. Its charting options are out of this world and they enhance clients’ trading experience by providing technical analysis indicators that help predict the future exchange rates and make a profit.
We always recommend to potential traders to look for a licensed broker that offers either MT4 or MT5.
BaronsVC Deposit/Withdrawal methods and fees
BaronsVC offers 5 account types – Basic, Silber, Gold, Platin and Diamant. There is no information on the company’s website what the minimum initial deposit is. When we tried the deposit funds option when opened the trading platform, the link was broken.
There is no information about the deposit methods either.
For withdrawals, we find out that the processing time for a withdrawal request is up to 3 business days. The fees on withdrawals depend on the withdrawal methods – for credit card, it’s 3.5%, for wire transfer, it’s $20 and there is a flat withdrawal fee if the withdrawal amount is less than $100.
An account that stays inactive for 3 months will be considered dormant and the monthly fee will be 0.5% of the account’s balance or $25 whichever is higher. Charging a percentage rather than a fixed fee is not to client’s advantage and please keep in mind that licensed brokers only charge a fixed fee, not a percentage.
Should you choose to accept a bonus from this broker, you must be aware that you cannot withdraw from your funds unless you meet the bonus policy requirements. To be able to withdraw, you must complete a trading volume of 0.1 lot times the bonus amount. For example, if you deposit $1,000 and accept a $100 bonus, then you must execute a trading volume of 10 lots before being eligible to withdraw. As you can see, this is not something easily achievable, so the best option is to not accept any bonuses and not trade with any broker offering bonuses. Please remember that legit broker never offer bonuses or other incentives.
How does scam work?
No one wants to be duped by scammers, but it happens all the time because they know how to manipulate people. As they say in one popular song “sweet dreams are made of this” and this is what scammers rely on – creating in people’s mind a sweet dream of being rich! Scams usually start by unsolicited telephone calls or ads on the Internet or social media promising quick and easy profit. It is easy to fall into scammers’ trap and once you make a deposit, you are done for! Scammers won’t let you get away easily even if you realise that you are being scammed. They will try to delay you when you try to withdraw your funds by asking you to provide this document or fill out this form, etc., in order to make you miss the deadline when you can file for a chargeback.
What to do if scammed?
You need to act very quickly. First of all, if you have made a deposit using a credit card, you must immediately file for a chargeback. Fortunately, VISA and MasterCard allow for 540 day period in which you can file for a chargeback. This is the good news. The bad news is that if you have made a deposit using bank wire or Bitcoin, the chances of you getting your funds back are nil!
Another thing you can do is cancel your credit card if the scammers have your CVV code. Check your PC and erase the software that gives scammers access to your personal data.
Be careful, because even doing all that we recommended, your unfortunate experience with scammers may not be over. There are so-called recovery agents. One of those may approach you offering to recover your funds for a fee. Do not trust them and always check the legitimacy of the recovery agent and the agency.
Also, be aware that some “victims” of scam may post comments after the review, saying how they lost money and how a recovery agent helped them retrieve their funds. They will even put the contact info for this so-called recovery agent. Do not trust them either as it is another case of scam!
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