Cryptonix Scam Review
One of the top selling trading instruments that you can find nowadays are cryptocurrency. It started off with Bitcoin in 2009 and now the market has expanded to include hundreds of new cryptocurrencies. In the beginning, there had been some doubt surrounding their future because they were highly volatile and mostly used in illegal activities. However, things have changed considerably in the last few years as more and more countries have lifted crypto restrictions and they are being adopted all over the world. While their volatile nature remains unchanged, investing in cryptocurrencies can pay off in a major way.
Therefore, it is not surprising to see more and more people flock to this market when they wish to earn money through trading. Are you following the same route? You can trade some of the top cryptocurrencies, such as Bitcoin, Ethereum, Ripple, Litecoin and more and earn considerable profits. However, in order to make it happen, you first need to find an exchange that will facilitate you in this regard. One crypto exchange that you will come across is Cryptonix. Based in London, Cryptonix is owned and operated by Wilkinson Europe LTD and started offering its services in June, 2018.
Obviously, the first thing you need to determine is whether it is a legitimate crypto exchange or not. After all, there is no shortage of scams in the cryptocurrency market and many such exchanges have turned out to be shams. Sadly, it seems as if Cryptonix is just more of the same. It is an unregulated CFD and forex brokerage that’s attempting to pass itself off as a cryptocurrency exchange. Such attempts have become a common occurrence by brokerages because the crypto world is still mostly unregulated and new. Therefore, they believe it is possible for them to get away with anything at this point. How does Cryptonix lure in people? There are several tricks that it uses, which are:
It offers a variety of cryptocurrencies
The best way to attract people who want to trade cryptocurrencies is to offer them the opportunity of trading as many as possible. This is exactly what Cryptonix does. It gives its potential clients the chance to trade some of the leading and profitable cryptocurrencies in the market, such as Bitcoin Litecoin, Ripple and more. Most traders like diversifying their investment and so the option of trading multiple cryptocurrencies via one exchange can be tempting.
It has a reasonable minimum deposit requirement
Another way Cryptonix has managed to attract potential customers is by imposing a reasonable minimum deposit requirement for signing up with the exchange. When you are trying a new exchange, you obviously wouldn’t want to invest a lot of money with them unless you have tested their service. Knowing this logic, Cryptonix only asks for a deposit of $250, which is the industry average.
While these offerings can certainly make you consider signing up with Cryptonix, you should also look at the other side. There are numerous reasons why you should avoid the cryptocurrency exchange altogether. Some of these are:
Lack of regulation
This so-called cryptocurrency exchange is not regulated and it doesn’t mention any regulation on its website. Even though the website’s layout has been designed in such a manner to convince people it is a crypto exchange, the truth doesn’t even come close to it. What gives Cryptonix away is the list of account types mentioned on the website, along with their minimum and maximum deposit requirements. This is not how crypto exchanges function; they usually offer their clients wallets for storing their real cryptocurrencies. Thus, Cryptonix is just a CFD brokerage, which lacks proper regulation, and there are a lot of risks in dealing with such a broker.
First and foremost, the lack of regulation means that you do not get any assurance for the safety of your funds. Brokerages that are authorized and regulated by some prestigious regulation agencies, such as CySEC and the FCA, have to comply with a set of rules. One of these rules include segregating customer accounts, which means that client funds are kept separate from that of a broker. This can lower the risk of potential fraud significantly. Moreover, there is also a compensatory mechanism in place for protecting clients in the event of a broker’s bankruptcy.
Hence, as Cryptonix is not regulated by a proper authority, which it should be considering it is based in London, United Kingdom, it is a risk to put your trust in it.
No MT4 trading platform
Instead of the popular MetaTrader 4 trading platform, Cryptonix claims to offer its own web-based platform to traders. However, the MT4 is one of the most comprehensive trading platforms out there, which can be accessed via the browser or can also be used on mobile devices. This platform also allows traders to design and alter their own auto-trading bots or use ones that already exist.
Withdrawal fees and more
Another warning sign of unregulated brokers is that they charge withdrawal fee and a lot of other charges. The same applies to Cryptonix as it charges you for withdrawals and there is also a processing fee applicable. Such high fees cannot be found with credible brokers and exchanges, unless there are specific conditions. You have to pay $50 every time you want to make a withdrawal and there is also a processing fee of $10.
High spread on Bitcoin
As the brokerage wants to pass off as a crypto exchange, Cryptonix is only offering CFDs on cryptocurrencies via its platform. If you take a look at the spread being offered for Bitcoin, it is around $100, which is almost double of the industry average. A high spread is a major disadvantage because it increases your cost of trading.
Thus, Cryptonix is an unregulated CFD brokerage, which doesn’t classify as a crypto exchange, and is simply misleading its clients. It has a high cost of trading and is vague about what customers can expect from its platform, which throws its legitimacy into question.