Trading via crypto-forex brokers is not too different from traditional trading mechanisms. The process requires the user first to open an account with the broker with some funds. A trading account typically involves filling an online form with a broker followed by account verification. Notably, the requirement for account verification differs on a case to case basis as some brokers also allow withdrawal and deposit of funds into account without mandatory verification.
The responsibility is on you as an investor to be sure whether your cryptocurrency broker is regulated or not, regardless of the claims they make. Thankfully, it is easy to check if your bitcoin broker is regulated by checking on the national financial markets’ regulator in the country your cryptocurrency broker is located (which is, ideally, also the country you are residing in).
Forex or Cryptos, Which Should I Trade? 😕
The simple truth of the matter, however, is that forex and crypto trading are frequently conflated in the minds of traders, particularly those who don’t have as much experience of the markets. Success in one may lead a trader to dabble in the other, and any misunderstanding of the differences (as well as the similarities) between the two could lead to a disastrous trading strategy. The fact that both markets offer options such as leverage, CFDs, short term trading opportunities, longer term investment plans and arbitrage means that there is a good deal of overlap between the two, but they each offer opportunities and challenges which are completely unique.
In cryptocurrencies, however, there are no laws protecting outsiders. Why? Simply because regulations have not caught up to the rapid rise in cryptocurrency trading, and also many altcoin founders and exchanges operate outside of the U.S. in countries like Switzerland and Singapore. Many cryptocurrency exchanges also do not collect any identity information (name, national id), etc., which makes tracking and punishing the actual people behind unfair trading activities difficult. Not only that, these exchanges are currently not reporting suspicious activities to any government agency. Therefore, no government has any data to determine whether certain activities are illegal or not, or to convict anyone.
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