Another Forex IB Scam? Mfeforex Rejected Investor’s Withdrawal

Broker: Mfeforex

Regulatory status: overrun

Complainant: Mr. Cheng

Cause of complaint: Withdrawal failure

A few months ago, the scandal of forex broker FFS and its related introducing broker group stirred up the forex circle, and the issue of introducing brokers became a much discussed topic. Another investors report that WikiFX got recently resembles the FFS scandal, as in both cases the trading platform and IB were suspected to be manipulated by a same group of scammers. The investor, Mr. Cheng, shared his experience of being defrauded.

Event recap

In March, 2018, Mr. Cheng was introduced to Mfeforex by an IB and began trading on the platform, during which he remained in contact with the IB agent about his deposits and other investment issues. At first, Mr. Chengs investment at Mfeforex was profitable and he also developed a trust for the IB, so he never doubted the compliance of Mfeforex. But in December, he was suddenly unable to withdraw.

Mr. Cheng immediately consulted the IB, who told him that the withdrawal channel was “temporarily unavailable” and directed him to transfer his account balance to a designated account, assuring him that they will assist his withdrawal by first “borrowing” and then “returning” the money. The IB also offered a loan receipt and promised to repay the debt within a year. Under the IB‘s instructions, Mr. Cheng soon completed the rather peculiar “withdrawal” process and got the “loan receipt” from the IB, but he never received any refund after waiting for a long time. What’s worse, Mr. Cheng also found he could no longer log in the account on Mfeforex , rendering his account balance unavailable. When he tried to contact the broker by email, the address turned out to be invalid. Mr. Cheng then realized that he was cheated.

Analysis

The recent FFS IB scandal revealed the dark sides of illegal forex introducing brokers and consequently led to a wave of trust issues between investors and IBs. In Mr. Chengs case, the IB was unnoticeable at first, but as the event unroll, it eventually came to the front stage. The “withdrawal” method it offered Mr. Cheng was rarely seen among the hundreds of exposures made by WikiFX - when investor failed to withdraw from the platform, the IB proposed to assist his refund in the form of “loans”- and what happened next proved that their motivation had nothing to do with responsibility. The “refund” that Mr. Cheng failed to receive was likely to have been pocketed by the IB already, while the inaccessible trading platform and the unavailable balance seemed to suggest some suspicious connection between the IB and Mfeforex itself - It might have been the same group of scammers that were manipulating both of them.

According to the WikiFX App, the NFA(US)s license for generic financial services that Mfeforex claimed to hold had expired, and the broker has been labeled as “illegal”.

Per investigation, Mfeforex uses white-label MT4 software and is related to the following 6 white-label brokers: Sense Leader(offshore regulation), FFD(suspected cloned license), BwForex(unregulated), ANGUS(overrun), AUG(overrun) and KARTARIE(suspected cloned license).

Please be careful about these brokers.

Conclusion

Although the frequent exposures of illegal forex IBs adds to investors‘ mistrust and concerns, it’s also true that revelation of such scandals helps to weed out the unqualified brokers and let the credible ones thrive. We remain optimistic about creating a better forex investment environment, and WikiFX will continue to expose illegal brokers, bring investors more valuable information and be the reliable assistance for investors during their investment.