As the CFTC states on their website, “Investors should make sure that anyone offering a forex investment is properly licensed and has a reputable business history.”
In the US, forex trading is regulated by the CFTC and NFA. They set the requirements a broker must meet in order to offer services to US residents. Though not an exhaustive list, this page will give you an idea of some of these requirements: Compliance Requirements for Retail Foreign Exchange Dealer (RFED) Applicants | NFA
Particularly noteworthy are the requirements for financial transparency and trade execution accountability. Below is a quote from the CFTC site:
The final forex rules put in place requirements for, among other things, registration, disclosure, recordkeeping, financial reporting, minimum capital and other business conduct and operational standards. Specifically, the regulations require the registration of counterparties offering retail foreign currency contracts as either futures commission merchants (FCMs) or retail foreign exchange dealers (RFEDs), a new category of registrant. Persons who solicit orders, exercise discretionary trading authority or operate pools with respect to retail forex also will be required to register, either as introducing brokers, commodity trading advisors, commodity pool operators (as appropriate) or as associated persons of such entities. “Otherwise regulated” entities, such as financial institutions and SEC-registered brokers or dealers, remain able to serve as counterparties in such transactions under the oversight of their primary regulators.
The final rules include financial requirements designed to ensure the financial integrity of firms engaging in retail forex transactions and robust customer protections. For example, FCMs and RFEDs are required to maintain net capital of $20 million plus 5 percent of the amount, if any, by which liabilities to retail forex customers exceed $10 million. Leverage in retail forex customer accounts will be subject to a security deposit requirement to be set by the National Futures Association within limits provided by the Commission. All retail forex counterparties and intermediaries are required to distribute forex-specific risk disclosure statements to customers and comply with comprehensive recordkeeping and reporting requirements.
These requirements are rigorous enough that only four brokers are approved as forex dealer members in the US as of the latest data from the CFTC.