SimpleFX Review
SimpleFX is an offshore broker that has attracted negative attention from some regulators.
While SimpleFX does not appear to be an outright scam like many of the websites we write about here, its activities are subject to absolutely no regulation and its clients do not receive the guarantees and protections they would enjoy if they were working with a licensed broker. It is advisable to approach this broker with caution.
SIMPLEFX REGULATION AND SAFETY OF FUNDS
SimpleFX is owned and operated by SimpleFX Ltd, a company stated to be incorporated in Saint Vincent and the Grenadines (SVG). A check of the Financial Services Authority (FSA) of St. Vincent and the Grenadines database confirms that the SimpleFX Ltd is registered there:
However, this registration does not mean much. The FSA does not license forex brokers and does not regulate their activities. The institution has repeatedly issued warnings on this issue, with the latest such warning dated 23 June 2021:
Some large brokers are registering offshore companies in the SVG or other offshore areas so that they can compete more effectively in emerging markets in Asia and Africa without being shackled by regulations in jurisdictions such as the EU, the US or Australia. In these cases, the established brand should serve as a guarantee that the offshore company will apply good business practices. In the case of the SimpleFX, however, there is no large regulated broker whose image could serve as a guarantee.
In addition to this, it should be pointed out that SimpleFX does not have a good track record with regulators, especially in the European Union. In December 2021, the Italian financial regulator Commissione Nazionale per le Societa e la Borsa (CONSOB) blacklisted SimpleFX. In previous years, other EU regulators have also taken action against this broker.
If you have decided to trade on the financial markets, and especially if you do not have much experience in this area, it would be wiser to use the services of a licensed and regulated broker.
Depending on your location, it is advisable to choose a company that is regulated by an institution such as Commodity Futures Trading Commission (CFTC), Australian Securities and Exchanges Commission (ASIC), UK’s Financial Conduct Authority (FCA) or some EU regulator like Cyprus Securities and Exchange Commission (CySEC).
Clients of these brokers receive protections such as negative balance protection and segregation of the client’s funds from the broker’s funds. In the EU and the UK, brokers must also participate in guarantee schemes that cover a certain amount of the trader’s investment if the broker becomes insolvent. These guarantees amount to up to 20 000 EUR in the EU and 85 000 GBP in the UK. However, the likelihood of such a bankruptcy is low because regulators also have significant net capital requirements that companies must maintain – EUR 730 000 in UK and Cyprus, AUD 1000 000 in Australia and at least 20 million USD in the United States.
SimpleFX states that it also offers negative balance protection and segregated accounts for customers’ money. But as long as there’s no regulatory framework mandating a broker to offer these protections, you can rely solely on their word.
SIMPLEFX TRADING SOFTWARE
SimpleFX highlights the simplified mobile trading app as its main advantage. The app is available for Android, iOS and Huawei devices. In addition to this, the SimpleFX also offers a standard desktop trading platform, MetaTrader 4 (MT4). This software is available for Windows, Linux and Mac. Here is what the platform looks like:
A comparably functional web-based platform is also available in the SimpleFX client portal, but it is not a web version of MT4.
Regulated brokers also typically offer a wide range of trading software which almost always includes MetaTrader 4 (MT4) and newer and more advanced MetaTrader 5 (MT5). These platforms have established themselves as industry standard because they offer a wide range of features, including a variety of options for customization, multiple account usage, designing and implementing custom scripts for automated trading and backtesting trade strategies.
The SimpleFX is not offering some additional services that are becoming popular among brokers, such as social trading, which allows automatic copying of trades of selected seasoned investors.
SIMPLEFX TRADING CONDITIONS
The broker does not offer different types of trading accounts. There is no minimum deposit, and the client’s wallet can only be in Bitcoin.
The number of financial instruments offered by the SimpleFX is relatively limited. At the time of writing this review, the broker offers 70 instruments, mainly including currency pairs, indices and cryptocurrencies.
The website contains detailed information on trading conditions for each trading asset. A spread of 0.9 pips is specified for the benchmark currency pair EUR/USD. This is consistent with the levels we have seen on the trading platforms as well as the industry average.
Leverage ranges from 1:100 to 1:500 depending on the size of the account balance. Counter-intuitively, the highest level of leverage, which also carries the highest risk, is reserved for the accounts with the lowest investments.
The SimpleFX also offers a bonus of up to 2,500 USD towards the first deposit. This also differentiates SimpleFX from licensed brokers, as all leading regulators prohibit brokers from using bonuses and promotions.
SIMPLEFX DEPOSIT/WITHDRAW METHODS AND FEES
SimpleFX’s focus on cryptocurrencies is evident from the payment methods available. These include a large number of cryptocurrencies, including some exotic ones. The only alternative is the FasaPay e-wallet, which can be used with US dollars and Indonesian rupiah.
Some regulated brokers also accept cryptocurrencies, but do so alongside more standard and transparent payment methods such as bank transfers and credit cards.
There is no minimum amount and no fees for deposits. For withdrawals, the minimum amount depends on the currency. For Bitcoin, the minimum is 0.00005 BTC, which at the time of writing this review equates to about 2.5 USD.
There is also no withdrawal fee when using cryptocurrencies. If FasaPay is used, the fee is 1%.
However, if the account is deemed inactive, there is an additional 3% withdrawal fee. No specific criteria for an inactive account are listed on the website. According to the Terms and Conditions, this is at the discretion of the company.
BOTTOM LINE
SimpleFX does seem to offer what it claims – a simplified platform for trading major financial instruments on relatively competitive terms. However, the offshore registration, lack of regulatory oversight and reliance solely on cryptocurrencies makes this broker controversial and only suitable for people who are willing to take on additional risk.
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