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Digibits Network Limited Review 2023
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Digibits Network Limited Review 2023
Digibits Network Limited insists to be a broker you can trust and promises quick, easy and profitable online forex trading. And they even claim to be regulated, which could have been a fantastic news, if only it was true. In reality however, the broker is based offshore, it has no legit forex license whatsoever and basically displays every sign of a scam we can possibly think of. If you are still considering their offer for some reason, think again and check the following lines.To get more news about digibits review, you can visit wikifx.com official website.
Digibits Network Limited Regulation and Safety of Funds
Digibits Network Limited claims to be licensed and regulated by the Financial Services Authority (FSA) in St. Vincent and the Grenadines.
But that could not possibly be the case, because the local financial authorities in St. Vincent and the Grenadines simply do not issue licenses to forex and CFD brokers. And the FSA has even issued a special warning on the topic clearly stating that “the FSA does not issue any licenses to carry on the business of FOREX Trading or Brokerage or Binary Options Trading nor does the FSA ‘Regulate, Monitor, Supervise or License’ International Business Companies (IBCs) which engage in such activities. FOREX or Brokers Trading licenses are not issued by any authority in St. Vincent and the Grenadines,” the warning reads. Take a look as well:Not that we value much offshore licenses issued by offshore regulators in general, because offshore regulators hardly have the capacity to oversee internationally operating broker like Digibits Network Limited, but what we actually have here are without any doubt outright scammers, who openly lie about being regulated in an apparent attempt to scam traders.
What are the risks of trading with unregulated brokers?
Depositing any money with unregulated or offshore brokers is how people get usually scammed. And that also applies to shady crypto investment firms, disguised as commodity pool operators in the U.S. As a matter of fact just days ago the U.S. Commodity Futures Trading Commission (CFTC) revealed “the largest fraudulent scheme involving Bitcoin charged in any CFTC case”, involving some 23 000 victims from the United States alone, who have lost over 1,73 billion USD to a unregulated entity called Mirror Trading International Proprietary Limited (MTI), presented as a global foreign currency commodity pool.
CFTC issued a civil enforcement action against MTI and its manager Cornelius Johannes Steynberg before the U.S. District Court in the Western District of Texas, charging him with alleged fraud and registration violations. The U.S. financial authorities allege that Steynberg and MIT were involved in an international fraudulent multilevel marketing scheme between May 2018 and March 2021, in which victims were solicited via social media and different websites to hand over their funds, although they were not eligible contract participants and MTI was not registered with CFTC.
Regulatory framework in the U.S.
Obtaining a U.S. forex license is a serious business. To begin with the broker should be licensed and authorized by the CFTC as Futures commission merchants and Foreign exchange dealers and should be accepted as a member of the National Futures Association (NFA).
And such a license does not come cheap – the minimum operational capital requirement is in the amount of 20 million USA, which kind of explains why only a handful of really big broker firms are authorized to service the U.S. market.
Apart from that the trading specifications in the U.S. are somewhat different than those in the EU, the UK and Australia. For a start the leverage cap is set at 1:50 and traders are not allowed to hedge their positions, because of the so called FIFO (first in – first out) rule.Also American traders are not protected by any client compensation schemes, which could have protected them in case their broker happens to be insolvent, nor are they provided with negative balance protection, which basically means that with certain trading instruments like options for example they can end up losing more money than they have deposited initially.