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.
It is also suspicious that this broker only accepts crypto deposits. For US 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 discover why using Hankotrade in the US could expose you to punitive regulatory actions. In the end, you will discover better Hankotrade alternatives.
Overview
Hankotrade is an online broker offering 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.
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.
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 US 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 specific requirements and standards to prevent fraud and other illicit activities that could harm investors.
Is Hankotrade regulated in the US?
Hankotrade is not registered with the SEC or the CFTC, the regulatory authorities that oversee brokers in the US financial markets. So, as it stands, Hankotrade is not regulated in the US.
Hankotrade offers trading in forex and commodities and CFDs in indexes. These markets are regulated by the CFTC.
While Hankotrade states on its website that it does not provide trading in the financial products it offers to US investors, it accepts clients from the US. In fact, much of the broker’s traffic comes from the US:
Since the financial products Hankotrade offers fall under the CFTC oversight, the broker must be registered with the regulator to provide these products to US investors.
However, it has been accepting US 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 US 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 US are subject to additional oversight.
For example, FINRA regulates registered brokers that offer trading in stocks, bonds, futures, options, and other financial products. Its goal is to safeguard market integrity and protect investors’ interests. 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 that cash and securities in brokerage accounts are up to $500,000 so that 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.
Alternatives
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.
Interactive Brokers
Best overalleToro
Best for social trading and stock commission-free tradingWebull
Best for trading stocks and options commission-freeDEGIRO
Best for low-cost trading from Europe
If you want to check out more Hankotrade alternatives, read our In-depth Broker Reviews, take a look at our Broker Comparison Table or try out our Broker Matching Tool.
Bottom line
If you are seeking a safe and regulated broker, you would want to look beyond Hankotrade. Hankotrade presents itself as a low-cost broker offering trading in a broad range of financial products and providing generous leverage to investors with little money. But it is not a safe broker at all, and under no circumstance should you want to trust it with your money.
Hankotrade is not regulated by any financial market authorities.
Because regulatory licenses speak to broker legitimacy and credibility, legit brokers typically seek to become regulated by the top financial authorities to build customer trust. But Hankotrade has not sought such regulatory oversight.
We hope this Hankotrade review has helped you to see why Hankotrade is an illegal and unsafe broker that you should avoid at all costs.
