Beware! Mycoinology 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.
Mycoinology is a broker that offers trading in Forex, Stocks, Indices, Commodities and Cryptocurrencies. They have 3 types of accounts, Starter, Premium and Business, depending on the minimum deposit required – €250, €2500 and €25000, respectively. The other differences are the spreads offered – from 1.0 pips for the Starter to 0.0 pips for the Business account, and the commissions – the Business account charges €15/micro lot, while the other two come with no commission.
Registration with the broker required to submit our Names, Email address, Phone number and Physical address, as well as to select account currency – EUR or USD. After doing that there was no success message displayed, nor a confirmation email was sent – quite a sloppy implementation that raises a flag, since no self-respecting website owner asking for your personal details and to invest money with them can afford something like that. Instead we were taken directly to the client area, which unlike the flashy website has very poor design.
Mycoinology Regulation and safety of funds
This broker looks completely anonymous. With the exception of a phone number with a UK prefix and a statement in the Terms and Conditions regarding “Estonian Governing laws”, there is no physical address or any information about where the company is registered throughout the website.
Because of the phone number we decided to check with the Financial Conduct Authority (FCA) – the government agency responsible for regulating financial services in the United Kingdom. The result was that Mycoinology is “an unauthorised firm that may be doing activities that should be regulated by the FCA but it does not have permission to do.” What is more, it turned out there is even a warning against the broker:
Considering that, any claims they put on their website, for example how “your balance will never go under zero”, should be taken with healthy distrust.
Top watchdog agencies, such as the FCA or Cyprus Securities and Exchange Commission (CySEC), impose strict rules on their licensees. They have to maintain Minimum Capital Requirements of €730000 to ensure their good financial standing and participate in Compensation Schemes that provide additional guarantees to investors’ funds in case the broker goes bankrupt – up to 85,000 GBP in the UK and 20,000 EUR in the EU. In addition, regulated brokers must keep their clients’ money in segregated accounts – separate from their own operating funds, while the Negative Balance Protection policy ensures that the traders may not lose more than the total sum deposited, in this way effectively preventing indebted accounts.
Mycoinology, however, is an anonymous, non-regulated broker, so they are not bound by these rules and policies. Any claims regarding the good trading conditions and tight spreads they offer or the safety of clients’ funds are not guaranteed by any regulatory agency, so we would warn our readers that there might be a risk to their money if invested with this broker.
Mycoinology Trading Software
The broker offers some proprietary WebTrader platform that we have not heard of, but is referred to as “the most popular trading platform among expert traders because of its level of expertise, advanced features and the simplicity to personalize its services.” These features and the other “available” tools must have been very well hidden, because what we saw is the list of currency pairs on the left, the chart(s) and a couple of indicators, with a very poor design. Mycoinology also claims this software is available as Desktop and Mobile applications, but there are no download links in the client area or the website.
Respectable forex brokers, on the other hand, usually offer the MetaTrader 4 (MT4) or the MetaTrader 5 (MT5) trading platform. MT4 is considered the world’s number one platform, preferred by over 80% of users. It offers an intuitive and user-friendly interface, advanced charting and analysis tools, as well as copy and auto-trade options. Its successor, MT5, has some advantages – it allows traders to execute trades on different financial markets through a single account and there is a hedging option. Both platforms are available as desktop and mobile (iOS and Android) applications as well.
Mycoinology Trading Conditions
The trading conditions Mycoinology advertises for their accounts are quite competitive. In the WebTrader screenshot above we also see a very tight spread of 0.2 pips for the EURUSD currency pair. Considering that this is not an established platform and the broker is not regulated we have suspicions that these conditions may have been tailored.
The leverage advertised is not very big – up to 1:150. Regulated brokers, however, restrict it even further, because trading on leverage entails significant risks to inexperienced traders – one can make big profits, but in the event that you lose, your losses will be multiplied, and it may turn out you have lost much more than what you invested. In the USA the leverage cap is 1:50, while for brokers licensed in the EU and the UK it is 1:30.
Mycoinology Deposit/Withdrawal Methods And Fees
The broker’s website states that various payment methods – bank transfer, e-wallets, credit/ debit cards – are available for deposit and withdrawal. In the client area, however, what we see is four payment processors, of which only two, NeoBanQ and iPayTotal, worked. As these are not known to us, we made a quick search and discovered that three of them have been named as payment processors facilitating forex scams.
Mycoinology also claims that traders “are able to fund their account with the lowest amount in the market – $250.” This is completely false as there are legitimate brokers with whom you can open an account with only $10. The fees this broker charges are very high as well – you can see for yourself on the screenshot below.
What is most disturbing, however, is a clause we find at the end of their Deposit and Withdrawal Policy, stipulating that “the Client agrees not to lodge a request to the bank to charge back the payment which has already been credited to the trade account or to the provider of a credit/debit bank card, both during and after the use of the Company’s services.” This basically says that if you are scammed you have no right to try to recover your money!
Overall, we conclude that Mycoinology is an anonymous, non-regulated broker and one should not trust them with his/her funds as the chances of losing them are very big!
How does the scam work?
This section is dedicated to showing how the most common scams work. Usually they are pretty simple and straightforward. Through internet ads promising quick and easy profits from forex trading potential traders are induced to enter their personal information, such as email and phone number. Once the users input this information, they will start receiving unsolicited calls from illegitimate broker representatives whose job is to persuade them to make the first deposit of about 300 USD, from which they make a fat commission. When this is done, the traders are transferred to senior scammers who are very good talkers and will start working on them to deposit even more money. At this time, if not earlier, most people will start suspecting some fraudulent activity and will want to withdraw their funds.
This however often proves impossible to do as the scammers put all their resources into convincing them that now is not the right time or that such action will lose them a lot of money in “potential profits”. If the users persist, these con-artists will find a number of excuses, usually hidden in the clauses of the accepted agreements, to delay withdrawal requests for as long as possible. The end purpose is to miss the limited time period for filing a chargeback with their bank and thus lose any chance of getting their money back.
What to do when scammed?
If you have deposited with VISA or MasterCard there is still a chance to get you money back since recently both companies extended their chargeback period to 540 days, especially when an online scam is involved.
Scammers will not stop at stealing directly from your bank account if you have provided sufficient details, so if this is the case be sure to change your password or security code right away.
Also beware of being scammed again by so-called “recovery agents”. They will ask you to pay a fee to recover your losses, but after paying them you will never hear from them again.
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