If you have been looking for the best broker or trading platform, you might have come across Hankotrade. While there are countless brokers out there, not all of them would be ideal for everyone. That is why you might wonder whether Hankotrade is a good fit for you.
Hankotrade is not regulated, so it is not safe to use. It is also suspicious that this broker only accepts crypto deposits. For U.S. residents, using Hankotrade would not only put your money at risk but could also put you in trouble with regulators.
In this Hankotrade review, we explore why Hankotrade is not a broker you can trust with your money. You will also find out why using Hankotrade in the U.S. could expose you to punitive regulatory actions. In the end, you will discover better Hankotrade alternatives.
Hankotrade presents itself as an online broker offering trading in Forex and CFDs on cryptocurrency, commodities and indices. You can access the trading platform on the web as well as through desktop and mobile apps. Its major selling points are broad market access and generous leverage of up to 500 times.
The broker offers free and premium accounts.
It only accepts crypto deposits, with minimum deposits ranging from $10 – $1,000, depending on the account type.
Although Hankotrade states on its website that it does not provide its services in certain countries, anyone anywhere can sign up and use Hankotrade.
Hankotrade Review: Is It Safe and Regulated?
Before using any brokerage platform, the first thing you should try to establish is whether it is secure.
You can assess whether a broker is secure by looking at the measures it has put in place to protect investors’ money if something goes wrong. The regulatory environment that a broker operates in can also tell you about the security of investors’ money.
The SEC and CFTC in the U.S. and the FCA in the UK are some of the world’s top financial markets regulatory authorities that keep watch over brokerage operators. The other major broker regulators are the ASIC in Australia, BaFin in Germany, and FINMA in Switzerland.
Regulatory oversight is an important factor to consider when choosing a broker. Regulated brokers are subject to certain requirements and standards to prevent fraud and other illicit activities that could harm investors.
While regulatory oversight alone does not guarantee the safety of investors’ funds, checking a broker’s regulatory status can help you keep away from scams and fraud.
Is Hankotrade regulated in the U.S.?
Hankotrade is not registered with the SEC or the CFTC, the regulatory authorities that oversee brokers in the U.S. financial markets. So, as it stands, Hankotrade is not regulated in the U.S.
Hankotrade offers trading in forex and commodities and CFD in indexes. These markets fall under the regulatory authority of the CFTC.
While Hankotrade states on its website that it does not provide trading in the financial products it offers to U.S. investors, it accepts clients from the U.S. In fact, much of the broker’s traffic comes from the U.S.
Since the financial products Hankotrade offers fall under the CFTC oversight, the broker must be registered with the regulator to provide these products to U.S. investors. However, it has been accepting U.S. customers without the CFTC license. Additionally, the broker provides CFD trading, yet CFDs are prohibited in the country. That tells you that Hankotrade operates an illegal brokerage business in the U.S.
In fact, the CFTC has added Hankotrade to its RED List as an illegal broker, which should be a warning sign for anyone considering trading with this broker.
But it is not in the U.S. alone that Hankotrade operates in the shadows of regulatory oversight. The broker is also not regulated in the UK, Canada or anywhere else where it provides its services.
Is Hankotrade a safe broker?
With its global availability and rich menu of financial products, Hankotrade has attracted many users. Testimonies of Hankotrade users are mixed, though. While some have expressed satisfaction with the broker’s service, others have complained about disappearing funds from their accounts and other problems with the broker.
Where does this leave someone who is trying to figure out whether Hankotrade is a safe broker?
You have to know what a safe broker looks like and see if Hankotrade fits the bill.
Apart from requiring the SEC and CFTC licenses to operate, financial brokers in the U.S. are subject to additional oversight.
For example, FINRA regulates registered brokers offering trading in stocks, bonds, futures, options and other financial products. Its goal is to safeguard the market integrity and protect the interest of investors. FINRA members are required to comply with industry ethics.
FINRA is there to detect and prevent unethical broker practices to protect investors from financial fraud. It can fine brokers that fail to comply with its requirements.
SPIC is another entity that oversees brokers to safeguard the interests of investors.
While FINRA looks out to protect investors from financial fraud by brokers, SPIC protects investors’ funds in brokerage accounts. It ensures cash and securities in brokerage accounts up to $500,000 to ensure investors can recover some of their money if their broker goes bankrupt.
FINRA and SPIC are membership regulatory organisations. They protect the interests of member brokers’ customers. Nearly all brokers registered with the SEC and CFTC are FINRA and SPIC members.
Since Hankotrade is not licensed by the SEC or CFTC, it cannot be a member of either FINRA or SPIC. For that reason, your money is not safe with Hankotrade.
Since Hankotrade operates outside FINRA oversight, its users are not protected if the broker commits fraud against them. And for Hankotrade’s lack of SPIC membership, its users risk losing everything if the broker fails.
What happens if you use Hankotrade in the U.S.?
While Hankotrade is available in the U.S., it is operating in the country illegally. It means that if you get scammed on Hankotrade, there is nothing that you can do to hold the broker accountable.
But that’s not all. You could also get in trouble with the government if you are caught using Hankotrade, an unregulated offshore broker operating in the U.S. illegally.
In addition to forex, commodities and crypto, Hankotrade offers CFD trading to its customers anywhere in the world. While trading CFDs may be legal in other countries, CFDs are banned in the U.S.
CFDs are among the financial products regulated by the CFTC. It means that a broker must seek CFTC permission to offer CFD trading to its customers. But as it stands now, the CFTC does not allow brokers regulated by it to offer CFD products. The regulator also prohibits foreign brokers from offering CFD trading to U.S. residents.
If you manoeuvre around and use an unregulated foreign broker like Hankotrade to trade CFDs, you would violate CFTC rules. For that reason, the regulator could hit you with severe punishment if you are caught.
For example, the CFTC could fine you up to $200,000 for trading CFDs with a foreign broker. Additionally, the regulator could deny you access to the U.S. financial markets, such as regulated exchanges and clearinghouses, if you are caught trading CFDs using an offshore broker.
While Hankotrade may have some attractive features like access to several markets and generous leverage, it is not regulated and lacks protection for clients’ money in case something goes wrong. If you are looking for credible brokers that are regulated and offer secure trading platforms, check out our select Hankotrade alternatives below.