What to do if the broker has banned access for traders from your country

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How to be a trader if the broker has banned access to trade from his country?

Modern online trading is one of the most unpredictable areas of commercial activity, in which there are a huge number of “pitfalls” that can destroy even 100% of the plans of experienced traders. These include:

● sharp changes in the global financial market;

● the collapse of national economies;

● the emergence of new cryptocurrency;

● fraudulent schemes of financial brokers;

● errors of advisers tested by years;

● a huge gap between expected and actual results;

● changes in the strategic course of reliable brokers, etc.

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And this list can be continued for a very long time. That is, the average trader, not to mention those who take only the first steps in this industry, is simply physically unable to remember all the potential dangers that await him in the way of a merchant with financial assets.

How to become a successful trader?

If you are determined to become a professional trader, remember the most important rules, without which it will be very difficult for you to achieve this goal:

● forget that financial instrument traders become very wealthy people in a short period of time (many of them receive quite modest income over the years and only a few with perseverance and hard work achieve good results);

● carefully choose the broker with whom you will work (year of registration, regulators, capitalization, list of reputable investors, in which countries this marketplace provides its services);

● number of clients;

● types of accounts (including demo version);

● level of training of support service specialists;

● which government agencies control the platform;

● bonuses and contests;

● ways to replenish trading accounts;

● software and mobile application of this service;

● commission and fee for the services provided.

Some readers will ask a completely logical question, but what about the feedback from users of this trading platform? Unfortunately, recently this indicator is one of the dubious characteristics. This is due to the fact that as a percentage of real reviews about a particular broker, there are much fewer than custom comments.

When planning to work in the foreign exchange market or sell other liquid instruments, you need to accurately determine the amount of capital that you will invest in the development of your business.

And another important point that is directly related to the main topic of the presented article. This is a list of countries with the most stringent requirements of current regulators:

● United States (the undisputed leader, as in any other issues that demonstrate respect for the law).

That is, if your broker refused to provide services in the country of which you are a citizen, but at the same time he works in the UK, France, etc., you need to figure out how to continue cooperation with the platform bringing you stable profit.

Method # 1. Other people’s documents.

Nowadays (if you don’t go deep into metaphysical categories) you can buy / rent almost everything. If a well-known trading platform has left your homeland forever, try to find a resident of the “new / old shelter” who will pass the verification for a certain fee, open an account and give you all the necessary logins / passwords.

● You remain in the “shadows” without attracting the attention of our tax authorities.

● In some countries, you can sign a cooperation agreement with your partner, which will protect you from fraud on his part.

● And most importantly, your favorite broker stays with you, regardless of (let’s say, softer) “defenders of the interests of the people”.

● Despite the fact that your partners are from countries such as the United States, Switzerland or the United Kingdom, none of you are immune from fraud.

● There may be difficulties with prompt transfer of funds.

● For security reasons, you need to come up with a robust financial transaction plan.

Method # 2. Forex robots.

A novice trader, having checked the work of a financial robot to carry out trading operations using a demo account, is already mentally counting his income, which he will receive in a month or two, especially without straining. Expensive cars, relaxing in the best restaurants and traveling to the most exotic places in the world in the company of beautiful ladies are just the prelude to the beautiful life of smart traders who decide to make money with the help of special forex robots. That is why many newcomers call this way of earning the real Grail.

In this situation, some bidders will smile sadly, marveling at the naivete of gullible fairy tale lovers, while others will say that this is the only way to learn something. But striking cases where some novice traders, even in such situations, manage to make money. This happens in cases where a professional trader “loses” his broker, due to the fact that he leaves the country where he worked for many years. A trader, who is not much upset, also changes his place of work, earning his usual profit.

Method # 3. Open an account abroad.

Having opened a Borderless account on the TransferWISE service, you can work with almost any broker by registering an account and issuing a plastic card. Suffice it to say that this service allows you to work as a full-fledged citizen of the United States, Australia or the United Kingdom.

A similar situation is with Payoneer, a company that allows you to perform financial operations in the United States, regardless of the place of residence and citizenship of its customers.

Method # 4. His own master.

Probably, many readers have repeatedly asked the question, are there any options, when you can remove a trading platform from a chain of trader-broker-financial market. No problem. But for this, the trader will need huge financial resources (from $ 500,000) and very competently organize all subsequent work. But in this case, this trader will act as a broker, and this is a completely different story.

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

BitMEX Forbidden For US Traders?

BitMEX is world’s No1 margin trading platform for Bitcoin. In July 2020, believe it or not, the big broker firm reached 1,000,000 Bitcoin being traded on their platform on a single day. At a price level of round about 7000 USD that’s a total US Dollar value of about 7 billion.

BitMEX is the only broker where Bitcoin can be traded with up to 100x leverage which is one of the most outstanding features of the Bitcoin broker. Also they have a highly professional trading engine featuring advanced order types such as stop orders, trailing stops, take profit orders and a range of other helpful settings to automate processes. Once you’ve got how the system works you see that it’s super fast and easy to manage.

The extremely high daily trading volume was even reached in a time when US traders had already been banned since a while. And the US are among the leading countries in terms of cryptocurrency trading in the world.

Brokers And Exchanges Where US Traders Are Allowed:

  • Bitcoin Purchase
  • Bitcoin Trading
  • Altcoin Trading
  • USD, EUR, GBP, RUR
  • 3x Leverage
  • Bitcoin Purchase
  • Altcoin Purchase
  • USD, EUR supported
  • Popular Exchange
  • High Liquidity
  • Bitcoin Purchase
  • Altcoin Purchase
  • USD,EUR,GBP
  • High Liquidity
  • No margin trading
  • Bitcoin Purchase
  • Bitcoin Trading
  • Altcoin Trading
  • No Fiat
  • No Leverage in USA

Why Are US Customers Not Allowed Anymore To Trade on Bitmex?

At some point in 2020 BitMEX suddenly announced that they were about to disallow people from the US as traders on their platform. Really strange – this decision could obviously not be in their own interest since they would accept losing a remarkable amount of turnover. So the background must be some political pressure or fear of the United States to cause them problems if BitMEX doesn’t comply with their legal regulations.

US citizens are banned from BitMEX due to local laws in the US – basically the broker platform isn’t authorized by the CFTC (Commodity Futures Trading Commission), which is the base requirement for any trading platform to offer service in the US.

But are there for sure no US citizens trading anymore on BitMEX? It seems like the trading volume statistics could include an unrecorded number of US traders as we’ve found out that people from the United States are able to bypass the broker’s ban quite easily.

On the internet we find a lot of information that there are still US traders using the platform since technically there are still ways left to do so. The crux of the matter is just to know how.

Is There A Chance To Still Trade On Bitmex?

Although US traders are legally not allowed to trade on BitMEX anymore, it is technically possible to still benefit from the broker’s products and features when using the right access setup. At least this is what we found out when doing some research about the topic online.

This setup to still use BitMEX as a US citizen includes 2 major points:

Before opening the website in order to sign up on BitMEX for a new trading account, users must use a VPN (Virtual Private Network) to hide their US location behind a foreign IP address. The VPN simply routes your traffic through a server that is located in another country, so the websites you visit will think that you are from the country your traffic is routed through.

It’s of course important to use an IP of one of those countries that are for sure allowed, like one from Europe or an Australian one, for instance. Additionally, VPNs encrypt your data traffic so the data sent cannot be read by third parties. That’s why Virtual Private Networks are used as a protection against surveillance and spying. Users can surf anonymously and securely.

NordVPN and ExpressNPN among the VPN providers with the highest amount of servers on earth, their longterm subscriptions are very affordable, not worth mentioning for a profitable margin trader. A few Dollars per month for a secured data connection that is entirely private due to highest encryption standards sounds fair. For a new signup on BitMEX use this coupon link to get 10% discount on the trading fees for half a year.

While having the VPN connection enabled, US citizens can then sign up by specifying another country of residence in their account. And that’s pretty much it. Using a VPN to get a foreign IP address and filling in another country of residence are the steps to get a BitMEX trading account even as someone from New York, Washington State or somewhere else in the United States. US traders have to constantly use the VPN again when using the broker platform.

Please note: This article is not meant as an advice to people from the States, it’s just an objective report about a finding how US traders achieve to bypass the BitMEX ban.

BitMEX Doesn’t Claim ID Verifications By Default

The thing is that BitMEX doesn’t claim any ID verification steps by default. While other brokers demand a full ID verification in order to enable an unrestricted trader account with higher withdrawal limits (or unlimited ones) or to be able to deposit and withdraw fiat money by wire transfer – that’s all not the case at BitMEX.

They don’t ask for verification by default, they never want to have more from customers than a user name, a password and a country of residence – since they only allow BTC deposits and withdrawals they don’t need more from their users. ID verifications usually have to do with banks being involved in money transfers from or to the broker. Since this is not possible at BitMEX there seems to be no need for IDs. So there is only one kind of account, which is unrestricted from the beginning.

Nevertheless A Ban For US Traders

However, in their terms & conditions BitMEX state that US residents or people just located in the US are forbidden. Furthermore, they could demand an ID verification at any time. But that warning doesn’t seem to be something to worry about since ID checks don’t seem to be actually being practiced. At least you don’t ever hear anything at all about BitMEX checking their customers. But that’s just an impression we have. Traders who frequently withdraw their gains and don’t leave their BTC on the platform are save in any case.

So still there seem to be US traders who solve the ban problem by making use of a VPN, like people in this reddit thread also mention. Here is another reddit post about the same question.

When Will BitMEX Again Be Officially Available To US Citizens?

There is no information if and when US citizens might ever be allowed again on BitMEX. So the ban doesn’t seem something temporary, but more of a general decision due to US laws that are likely not exceptional short term laws.

So Which Countries Are Allowed?

The only geo restrictions mentioned in BitMEX’s terms and conditions is concerning the USA. The rest of the world is generally allowed. However, if you come from a country that bans crypto related sites by default you might possibly not be able to visit BitMEX. That’s again a case where virtual private networks are being used to bypass the ban. From BitMEX’s side such users might even be able to fill in their real country of residence, since BitMEX shouldn’t care in that case. But that’s just our personal appraisement and must be tested.

Why do Forex brokers not accept US clients?

It is a common known fact that the Forex market trading goes on 24 hours a day, 5 days a week. This happens due to the fact that there are multiple centers all over the world where the currencies are traded. Yet, even though the New York session tends to have the most significant impact on currency rate fluctuations, the amount of US based retail traders tends to be quite small.

If you are from the US you can be quite puzzled by the amount of brokers that are offering the services throughout the world, but are still not present in the States. Even though the US is the major market for various goods and services, for some reason FX trading for individual investors is not so common.

US residents can trade Forex

Before we move on any further, it is vital to state that Forex trading in the US is not prohibited. A trader from the US can trade FX online as easily as a person living in Europe or Australia. However, the main difference lays in the variety of brokers a trader can choose from.

There are a few reasons why the amount of FX brokers is very low, let’s examine each of them below.

Licenses and Regulations

When it comes to the brokers that operate in Europe, the regulatory environment is rather simple. Once a broker has obtained a license from one of the European regulators, it can easily accept traders from all EU countries. In other words, a UK Financial Conduct Authority regulated broker can accept traders from Germany, the Netherlands, Bulgaria and other EU member states.

However, when it comes to the US, European licenses simply do not work. A broker that wants to have traders onboard from the US has to be regulated by the NFA, National Futures Association. At this point you may ask, there are brokers that have multiple licenses, like CySEC, FCA, ASIC and more, why would they not get another one to provide services in the US? The reason for this is quite simple – capital requirements. While a broker has to have around $100,000 – $500,000 of locked capital to obtain one of the European licenses, NFA requires quite an enormous amount of capital to be able to operate in the US – 20 million dollars.

This amount of money only corresponds to a deposit that a broker has to make and does not include any legal fees associated with obtaining the licenses, employment of lawyers to be placed on the register and executives. In other words, the US market is an expensive market to operate on.

Even though some brokers make profit enough to afford it, 20 million dollars is quite a large sum to allocate just for a license. On average, the world’s 15th largest broker would hardly earn 10 million USD in profit annually, hence allocating a profit of 2 years for the privilege to work in one country is an extremely serious investment.

The situation with capital requirements was quite different back in 2008 and at that time there were quite a few brokers that accepted US clients. However, today the amount of US friendly brokers is just less than five.

Profitability

Now you may wonder, if there are only a few brokers in the US, why are more brokers not trying to penetrate the market? There are over 300 million people living in the US and it is quite hard to believe that there are no more brokers that could actually afford the NFA licensing. Well, the truth is that, although more brokers could deposit 20 million to operate, not every broker will find it profitable.

As you know, FX brokers earn from the volume traded, hence the higher the trader’s volume is, the more profit a broker makes. However, unlike European countries where a trader has access to the leverage of 500:1, in the US it is only possible to supply 50:1 leverage on majors and 20:1 leverage on minors. This means that a broker can expect to receive some 10 times smaller profit in the US than in Europe, provided that it has the same amount of traders with the same amount of deposits in the two regions.

Furthermore, yet needless to say, wages in the US tend to be quite high, so the whole process of financing the US-based operations is not cheap at all.

Regulator’s attitude

Even though it is already quite hard for some brokers to start operating legally in the US and then to become profitable, historically US authorities have also been seen as a hindrance.

Quite a few brokers have been heavily fined by the NFA for malpractice. While the impact of the reasons behind the fines could be quite insignificant, the fines tend to be heavy: ranging from $200,000 to $2 million.

In other words, a broker may spend a year working hard, and by the end of the year its profits (or even more) can be simply taken by the regulator as a result of certain misconduct.

Indirect competition

US traders have also been much more inclined to stock trading, this is why they often choose to acquire shares over currencies. In most cases, trading stocks is actually more expensive for traders (or more profitable for brokers) than Forex. This is why US based brokers not only have to compete against each other, but also in order to take a slice of the stock brokers’ pie by increasing the awareness about online currency trading.

Conclusion

The limited amount of FX brokers in the US is certainly caused by the heavily regulated environment that requires brokers to deposit a substantial amount of funds and, at the same time, decreases brokers’ profitability by limiting leverage.

This also results in a few unregulated brokers offering their services in the US as they can better meet the needs of the traders, while their legal and operational costs are minimal. However, unregulated brokers that accept US traders should never be your choice.

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