Going offshore to escape the CFTC

Broker Discussion Forex Brokers
4006

So what the hell happened with Tallinex ???

I’ve been gone for a while and am just catching up with the thread. Went back and read the last half dozen pages.

Clint, have you heard anything from Paul about Tallinex not accepting new US clients ? I still have my account with them and am still actively trading it without any problems. But, having just scanned through the last several pages of this thread, I’m wondering how much longer it will be before I get an email from them asking me to withdraw my funds and leave.

Damned US gvt. Grrrrr…!!!

4007

Maybe someday FATCA will be repealed… here’s a wee bit of hope.

article – Lawmaker seeks to investigate Obama’s foreign tax compliance law | TheHill

House Bill – Text - H.R.5935 - 114th Congress (2015-2016): To repeal the violation of sovereign nations' laws and privacy matters. | Congress.gov | Library of Congress

4008

I’ve had one PM from Paul (back on Oct 5) in which he confirmed the decision to stop accepting new U.S. clients.

He was not able to make further details public at that time. I hope and believe that when he is able to do so, he will return to the forum and lay out for us the factors which made this move necessary.

Your information is as current as mine, regarding existing accounts.

Consider yourself fortunate that you were able to establish a broker relationship with Tallinex before the door was closed to new clients.

My advice to you would be to maintain your Tallinex account, and wait for further information.

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We designated Tallinex as a Trusted Broker, because we came to believe that they are honest and reliable. That view has not changed, even as Tallinex has been targeted by the CFTC.

Unless and until the Washington Ruling Class is stripped of its power, and the apparatchiks at the CFTC are replaced with common-sense regulators, Tallinex (and many other good offshore brokers) will have to remain off-limits to new U.S. clients.

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4009

I made a template for those interested.

4010

I have never heard of this broker before do they accept U.S clients?

4011

On ANOTHER THREAD — Mike Wolski has posted a LINK to a document critical of the retail forex industry. This document is worth reading because it illustrates the Nanny State’s compulsion to meddle in financial activities which should be left to the free market, and should be off-limits to the nannies.

The document in question is an analysis/opinion piece written 5 years ago by a hedge fund called Philadelphia Financial Management of San Francisco, and submitted as a letter (via email) to the Securities and Exchange Commission, in response to an SEC request for comments on Retail Foreign Exchange Transactions.

Let that sink in for a moment.

The Securities and Exchange Commission does not have regulatory oversight of retail foreign exchange trading in the United States; that authority rests with our beloved CFTC. And yet, the SEC took it upon themselves to solicit comments from the public and from the financial services industry on a financial market totally outside their purview.

Regulators are control-freaks, by nature. They can’t help themselves. And there is no limit to the ways in which they will attempt to control our lives.

At this point, the document which Mike posted has mainly historical interest, because of its age. But, it serves to illustrate the anti-free-market mind-set of the Washington Ruling Class.

Thanks to Mike for posting it.

On another topic — the broker called LQDFX

I looked into this broker, and found the following:

They have been in existence for only about a year. They are domiciled in The Marshall Islands, but apparently their physical location is in the UK (based on their telephone number). And they seem to accept U.S. clients, judging by their account application page (although I did not go through the account opening process in order to test this assumption). Their website is extremely user-friendly, well organized, and informative. They offer a range of account types, and an impressive array of financial instruments (currency pairs, commodities, metals, etc.)

Here is their website — Forex Trading Broker - Online STP FX Trading | LQDFX — if you’re interested in checking them out.

We need some new candidates for our List. Maybe this one should be considered.

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4012

I’m new to posting on the forum, wanted to chime in as a US trader. I have been using LMFX for the past 3 months and have made successful deposits and withdrawals. Their customer service has been great and fast. The only deposit method open to US traders is bank wire which is fine for me. They go as high as 1:1000 leverage, I personally trade with 1:200. Unregulated as far as I can tell, but there are quite a few decent reviews about them, and I’ve had a great experience so far. A lot of the other offshore brokers I’ve researched have a lot of “scam” reviews and such.

4013

[QUOTE=“willyg44;789763”]I’m new to posting on the forum, wanted to chime in as a US trader. I have been using LMFX for the past 3 months and have made successful deposits and withdrawals. Their customer service has been great and fast. The only deposit method open to US traders is bank wire which is fine for me. They go as high as 1:1000 leverage, I personally trade with 1:200. Unregulated as far as I can tell, but there are quite a few decent reviews about them, and I’ve had a great experience so far. A lot of the other offshore brokers I’ve researched have a lot of “scam” reviews and such.[/

What is the difference in a bank transfer and international wire transfer. And do you new to pay in on a withdraw? Thanks

4014

Ah sorry, I meant wire transfer. There weren’t any withdrawal fees, and for the international wire transfers, they cover the transfer fees from the bank for deposits over $250 USD which is nice.

4015

In light of one of the previous brokers that have now stopped taking us clients I think it is not wise for representatives to post of this or any other forum. Think the cftc will go after them because they think [cftc] that this is proof that said firm with representative on internet forum is soliciting us clients. This is part of the cftc nanny state.

4016

That’s a good question, and one that I have worried about for some time.

Tallinex was very active on this thread for many months, creating a high public profile. That profile generated a lot of client interest in Tallinex, but likely also brought unwanted CFTC attention to them.

There is a U.S. lawyer / tax accountant who specializes in tax matters for traders, who imagines himself (incorrectly) to be an authority on offshore brokers and traders. This guy decided to appoint himself [I]Deputy Sheriff[/I] for the CFTC, and start reporting offshore brokers who host U.S. clients.

About a year ago, he put on his toy Deputy Sheriff badge and started accusing Tallinex and all of their U.S. clients of violating U.S. law. He was wrong on both counts — but neither he nor the CFTC let the facts interfere with their agendas. Tallinex basically told this guy to piss-off, and for a while he disappeared.

Tallinex hasn’t told us — and I don’t know — whether their decision to exit the U.S. market can be traced back to the meddling by this Deputy Sheriff lawyer a year ago. But, I have my suspicions.

Several offshore brokers (whom I will not name) who accept U.S. clients, have been invited to participate in this thread, and have declined.

And we know that several offshore brokers who state publicly on their websites that they do not accept U.S. clients [I]do, in fact, accept those U.S residents who apply.[/I]

It’s quite possible that these offshore brokers are wisely protecting themselves by maintaining the lowest possible profile with the CFTC. At the cost of foregoing valuable advertising exposure here on this forum, they may be shielding themselves from targeting by the CFTC.

When a question similar to yours was asked several months ago, I replied that I don’t know any solution to this situation, other than closing this thread, so as to stop calling attention to our offshore brokers.

I still don’t know any other solution.

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4017

Yes, I am based in the US and have been trading with them. Received withdrawals without a problem.

4018

Tallinex told me, too, through email and chat session that existing US accounts are not affected by the ban on new American accounts. Glad I got in while “the getting was good.” Paul Callen in a previous comment mentioned that “major players,” as he described them, in the US regulators war on offshore brokers, sometimes “fight dirty,” to quote him. What he might have been referring to was that they themselves (who are supposedly very respectable in the opinion of the public) will, I guess, sometimes break one or more major laws to trigger steps by another major player to get at Tallinex, by trying to cripple or put a stranglehold on their financial operations if Tallinex did not cooperate with them. Just a reminder as to how nasty this war probably is “behind the scenes.”

Paul Callen was one of the most intelligent, articulate, and highly informed individuals I have ever seen on this forum. I doubt that he will be allowed to comment here as freely as he has done in the past. That is a real shame. Maybe we should all start to carefully censor more closely in the future what we say here because we might just be giving our enemy “more ammunition.”

Trump in a recent public interview pledged to dismantle Dodd Frank. Let us all vote for him and hope he wins.

4019

Now THAT is the best news I’ve heard in years !!! That’d be fantastic if he got elected and then actually did that.

4020

This is all very concerning. So what is the solution for US citizens? Move out of the country? Go under the radar with some kind of foreign address to have an account off shore? Jump in now with someone who is accepting US clients and hold on tight and hope you can stay? If the CFTC cracks down further…wouldn’t it shut down US brokers like fxcm? Why is this attack on FX and not stocks? Just as “risky” it not more if you ask me.

4021

[QUOTE=“krisr;790124”]This is all very concerning. So what is the solution for US citizens? Move out of the country? Go under the radar with some kind of foreign address to have an account off shore? Jump in now with someone who is accepting US clients and hold on tight and hope you can stay? If the CFTC cracks down further…wouldn’t it shut down US brokers like fxcm? Why is this attack on FX and not stocks? Just as “risky” it not more if you ask me.[/QUOTE]

Foreign address won’t help you. I have a home in Tokyo and Odessa Ukraine. It’s the USA citizenship that determines if you can’t trade or not. I lost my ACM and Swiss quote accounts when they started dropping USA citizens. No work around.

4022

Very recently Clint asked if we should re-open voting and polling on “trusted brokers.” My immediate reaction then was yes, of course. I did not realize the serious thinking that Clint had put into that question. After thinking more about it,[B][I] especially after what happened to Tallinex[/I][/B], though, I have changed my mind 180 degrees. Commenters on this forum need to be constantly aware that what is presented here is also being presented to the predatory eyes of overzealous US regulators, and what they see probably goes through their minds over and over again if they think they can use that information to target another broker. What happened to Tallinex, a “trusted broker,” is prime and very painful evidence of that. First, I think that everyone here needs to make a printed or handwritten copy, [I]NOW OR AS SOON AS POSSIBLE[/I], of Clint’s Group One of offshore brokers accepting US traders in case that page suddenly and permanently disappears thanks to the zeal of the Dodd Franksters. Then, I think that we need to adopt a “go underground and stay underground” mentality concerning our comments here. By that I mean that we should completely and totally drop and forget about describing any broker as a Trusted Broker. That description needs to be deleted from Group One. That designation makes it super easy for the enemy to start targeting their next broker victim. Let the enemy try to figure out which brokers we consider the best. We should stop praising any broker and instead say only bad things about a broker if that broker warrants criticism so that we can avoid using that broker. From Clint’s Group One list we should assume that ALL of the brokers there are good and can be trusted. Traders can check out brokers on their own and do their own vetting instead of relying on other traders to openly share that information here with other traders [I]and with the enemy[/I]. Just from reading the past 200 pages of this forum new traders can gain a tremendous amount of information that will immediately help them decide which offshore broker to use. [I][B]I personally will try to remember to not praise any more brokers here, but will instead only criticize a broker to warn others about it, if that broker becomes a “bad actor.”
[/B][/I]
I think everyone here needs to remember that these overzealous Dodd Franksters will not stop trying to target offshore brokers offering high leverage until everyone of them has some kind of sanction against them, and that this is a “fight to the financial death” for these very well paid government employees seeking pay raises, bonuses, promotions, and a big fat government pension after they retire.

4023

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• In June 2015, there were 8 U.S. retail forex brokers, with market shares as follows:

FXCM - 34%
Gain Capital - 20%
Oanda - 19%
IBFX - 8%
Wedbush Securities - 8%
Interactive Brokers - 7%
MB Trading - 3%
RJ O’Brien - 0%

• By June 2016, the field had dwindled to 5 U.S. retail forex brokers, with market shares as follows:

FXCM - 34%
Oanda - 26%
Gain Capital - 25%
TD Ameritrade - 8%
Interactive Brokers - 7%

Not widely reported at the time, the days were numbered for TD Ameritrade and Interactive Brokers. Those two brokers are SEC-regulated broker-dealers (stock brokers), who also offered retail forex trading to their clients.

[B]On May 20, 2016, the SEC issued a ruling that said: effective July 31 SEC-regulated broker-dealers would no longer be permitted to offer retail forex products to their clients.[/B]

[I][B]LeapRate[/B][/I] picked up the story, and published AN ARTICLE on May 25, 2016.

At the time, I was unaware of this action by the SEC. And, as far as I know, there was no mention of it here in the forum until Jason Rogers, the FXCM rep, posted THIS on August 16.

The SEC action has forced TD Ameritrade and Interactive Brokers off the list of 5 brokers, above.

• [B]Now there are just 3 retail forex brokers licensed and regulated in the U.S.,[/B] with current market shares not yet reported:

FXCM -
Oanda -
Gain Capital -

If you are familiar with the monthly reports put out by the CFTC, titled [I]Selected FCM Financial Data,[/I] you know that various financial metrics are reported for Futures Commission Merchants (FCM’s) regulated by the CFTC. These firms are classified as follows.

FCM — commodity brokers (example: Advantage Futures LLC)
FCM-BD — commodity brokers who also deal in equities (example: Merrill Lynch)
FCM-RFD — retail forex exchange dealers (example: Gain Capital Group LLC)
FCM-SD — foreign exchange swaps dealers (example: RJ O’Brien Associates LLC)

Then, there are combinations of these designations, for example:

FCM-BD-SD — (example: JP Morgan Securities LLC)
FCM-RFD-SD — (example: FXCM)

(Note that these firms — the CFTC never refers to them as [I]brokers[/I] — all are referred to as FCM’s, which does not necessarily mean that they deal in futures; rather, it denotes that they are CFTC-regulated.)

The August 31, 2016, FCM Financial Data report (the most recent one issued) lists only 3 FCM-RFD firms (FXCM, Oanda, and Gain).

However, [I]Retail Forex Obligations[/I] (the far right-hand column of the table) are shown for 5 firms, including TD Ameritrade and Interactive Brokers, indicating that customers’ forex account balances at TD Ameritrade and Interactive Brokers had not yet been paid out, at the time that data for the August 31 report was compiled.

The September 30 report (which will be released in early November) is expected to show Retail Forex Obligations for only the 3 remaining U.S. retail forex brokers. Those figures will then be used to calculate the market shares of those 3 brokers.

At this time, we can guess that FXCM, Oanda, and Gain will each have about a third of the U.S. retail forex market.

We may never know how much cooperation, collusion, and/or coersion occurred between the CFTC and the SEC, resulting in the SEC ruling reported in the [I]LeapRate[/I] article, above. But, my guess is that these regulators work hand-in-hand with one another. It’s all part of a step-by-step campaign to destroy off-exchange retail forex trading, first in the U.S, and then if possible around the world.

The next-to-last paragraph in the [I]LeapRate[/I] article is chilling:

LeapRate spoke with a senior securities lawyer in the US who believes that this is likely just the first step by US regulators to possibly ban altogether highly leveraged retail forex trading. While the SEC might not have consulted with the futures and forex industry regulators (CFTC, NFA) in making its decision regarding the broker-dealers, those regulators will likely keep an eye on the SEC’s action – and it is not inconceivable that they could take similar action at some point in the future.

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4024

Grumble, grumble, grumble…

Hearing things like this, true as is may be, makes me really angry. :frowning:

4025

I have just heard that Traders Way is no longer accepting wire transfers from US or Canadian clients; they are suggesting customers move to FXChoice.