CFTC Client Advice Highlights What Clients Should Know Before Trading Forex Over the Counter | CFTC – Commodity Futures Trading Commission | Omd Cialis

Washington, D.CThe Commodity Futures Trading Commission today issued a client advisory warning the public against potential investments in over-the-counter (OTC Currency). The new guide Eight things you should know before trading forex, offers potential investors eight cautionary tales about the risks of OTC Forex trading. To guard against fraud, the recommendation encourages prospective investors to do thorough research about an OTC forex trader before making any deposits or giving out any personal information. It also describes what forex trader registration entails and why it is important, as well as general signs of fraudulent OTC forex websites.

The CFTC is seeing a growing number of complaints from clients who have deposited funds into accounts with unregistered OTC forex dealers but have subsequently been unable to withdraw their funds or earnings. There are several tactics fraudulent traders commonly use, including soliciting customers on social media; request payment in bitcoin or other digital assets; manipulation of currency prices and trading results; offers unusually high leverage; and refusing or ignoring customer withdrawals.

Verification of registration and disciplinary histories is particularly important when researching OTC currency traders, as OTC trading clients only trade against their traders. When a customer buys, the dealer is the seller; When a customer sells, the dealer is the buyer. Traders also control the information clients see on trading platforms and apps, including prices and account balances.

About the Office of Customer Education and Outreach (OCEO)

OCEO is dedicated to helping customers protect themselves from fraud or violations of the Commodity Exchange Act through research and development of effective financial education materials and initiatives. OCEO engages in outreach and education for retail investors, traders, industry associations and the farming community. The office also frequently works with federal and state agencies and consumer advocacy groups. The CFTC’s complete directory of customer training materials can be found at:

The Customer Advisory is available in full below and further


The Commodity Futures Trading Commission advises the public to thoroughly research over-the-counter (“Forex”) dealers before making any initial deposits or disclosing sensitive personal information. The research should include verifying that the trader and its employees are registered with the CFTC and verifying the trader’s disciplinary history with the National Futures Association (NFA).

Why registration is important

Registration with the CFTC and NFA means:

  • Principal and associated persons have conducted thorough background checks.
  • The company meets certain financial requirements.
  • Addresses and contact information for headquarters and branches are verified and accessible to customers.
  • The company or persons must undergo examinations and official supervision.
  • The company or persons must undergo examinations and official supervision.
  • Associated individuals have passed the required tests and meet other proficiency requirements.
  • The company or individual must adhere to disclosure requirements and standards of conduct.
  • If problems arise, customers can request help via the CFTC indemnity program or NFA arbitration process,

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Recently, the CFTC has noted an increase in fraud complaints from customers who have deposited large sums with unregistered offshore forex dealers. Customers found these retailers through social media friendships or referrals. However, when customers tried to withdraw their money, merchants didn’t respond or demanded additional payments.

Registration alone may not protect you from scams, but most scams are perpetrated by unregistered traders and individuals. Financial requirements, audits, and state and federal laws are also designed to help a registered trader meet their obligations. This is important in a market where the dealer is your only counterparty.

8 Things You Might Not Know About Forex

  1. You trade against the dealer. Unless you are buying forex futures or options on a regulated exchange, you are trading “over-the-counter” or over-the-counter (“OTC”). This means that you are not trading in an open market, only against your dealer. When buying, your dealer is the seller; When you sell, your dealer is the buyer. Your trader makes money when you trade more frequently, lose money, or pay fees, spreads, or commissions.
  2. Two out of three Forex clients lose money. Most OTC Forex clients lose money when all borrowing, financing charges, fees and other expenses are taken into account. Last year, about a third of clients at registered OTC forex dealers made a profit, while two-thirds lost money.[1]
  3. The trader controls the trading platform. When trading through an electronic trading platform, mobile app or a trader’s website, do not connect to a live exchange. You connect to the retailer who controls the information you see on your screen, including prices. In many cases, offshore unregistered traders have used popular trading software to create a semblance of legitimacy but manipulated trading data to steal customers. Compare prices against third party sources to ensure you are seeing legitimate market price movements and levels.
  4. Your ability to close or offset positions is limited to your trader. Since you are trading against the trader on their platform, you are limited to the trader’s prices and terms.
  5. Your deposits are not protected. If a trader disappears or goes bankrupt, you may not be able to get your money back. Before opening an account, make sure you receive and are accurate Check your account agreement to see what rights and protections you have. Next, review account deposit and withdrawal requirements, including any associated fees. Fraudulent traders typically refuse withdrawals until customers pay expensive undisclosed commissions, pay bogus taxes, or invest more to achieve higher account-level status. You should never have to pay more money to get your money back.
  6. You could lose your entire margin and more. OTC currency trading uses margin. Traders require a minimum amount to open and hold a position, which usually depends on the volatility of the currency pair you wish to trade. For example, a 2 percent margin requirement means you could open a $100,000 position with only $2,000 in your account. This high level of leverage amplifies both wins and losses. If the market moves against you, you need to add more money to your margin account or close the position. You can also be held liable for additional losses beyond your initial deposit.
  7. Sellers can have hidden conflicts. The merchant may employ vendors, social media influencers, or affiliate marketers to bring customers to its platform, but these relationships may not be known to customers. Sales reps may not have retail experience and are paid based on the number of leads they bring. Carefully investigate any statements that contradict or downplay any of the issues identified in this Advisory or any other risk described in the Advisory mandatory risk warning You must receive before opening an account.
  8. Many scams start on social media. Be especially wary of people you approach on social media, dating apps, messaging apps, or unsolicited email who want to talk about forex trading. Common warning signs to look out for are:
    • Urging them to move the conversation from another platform to a private messaging app.
    • Promising outsized and often guaranteed returns in a short period of time.
    • Forwarding to an unregistered merchant with no physical presence in the United States.
    • We offer you leverage that is higher than legal in the United States (2 percent for major currency pairs or 5 percent for other pairs).
    • Only accept Bitcoin, Ethereum or other digital assets as payment.
    • If you have a website that doesn’t show physical addresses of headquarters or branch offices, or the addresses don’t exist when you perform a street-level map search.
    • Use a WhatsApp customer service number or have no phone number at all.

If you think you’ve been the victim of a scam, visit us To review registration and disciplinary histories, visit

This article was prepared by the Commodity Futures Trading Commission’s Office of Customer Education and Outreach. It is provided for general information purposes only and does not provide legal or investment advice to any individual or entity. Please consult your own legal adviser before taking any action based on this information. This recommendation applies to websites and organizations that are not affiliated with the CFTC. The CFTC cannot certify the accuracy of the information in these non-CFTC references. References in this article to organizations or the use of organization, trade, company, or company names are for informational purposes only and do not constitute an endorsement, recommendation, or favor by the CFTC.

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