Donna Forex Forum

General => General Trading Discussion => Topic started by: Faithblaster89 on January 22, 2018, 01:27:19 PM

Title: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Faithblaster89 on January 22, 2018, 01:27:19 PM
Me and few other traders are in a very unconvenient situation with GDMFX. They claim that based on their ToS, they have right to hold our funds (profits and even the withdrawals) for up to 6 months, because our positions exceeds 1000 pips move during 48 hours and they call this "extreme volatility". With this excuse, they hold our funds since end of October (3 months already) and they are not able to explain why they dont return at least our deposits. We traded USDTRY and there a move of 1k pips during 48 hours is nothing unusual, while just opening spread was about 60 pips. Basicaly their message to traders is "Open a trade and pray that it will not move a lot in your favor, because then we can (and very likely we will) hold your money for up to 6 months and you will not be able to do anything during this period".

Do you think guys this is legal? At least it is pretty unethical by my opinion.

Here is the condition Im talking about from their ToS:

Service Interruptions due to Extreme Market Conditions
Under certain extreme market conditions, it is possible for the price of a trading instrument offered by GDMFX to change drastically within a short timeframe, leading to significant profits or losses for all customers who are engaged in trading with the said instrument or its derivatives. In order to guarantee the stability of its systems and liquidity, GDMFX shall reserve the right in all cases when the price of a trading instrument changes by 1000 pips or more, within 48 hours, to temporarily suspend, or delay certain Services to some or all of the customers whose accounts or trading positions have been affected. Such interruptions might be applied to some or all of the following services: deposit processing, withdrawal processing, internal transfer processing, or order processing for any period deemed necessary by the company, but not longer than 6 months from the date of the market event.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: wallstreet.forex.robot on January 22, 2018, 03:22:16 PM
I hope you do not hold a lot of money in this broker. It seems this is a common practice and you will be lucky if you get your money back:

http://www.forexpeacearmy.com/forex-reviews/9588/www.gdmfx.com

I wish you luck.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Faithblaster89 on January 22, 2018, 08:02:08 PM
About 43k USD at this moment and I know a trader who holds almost 100k with them and is in the same situation.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: wallstreet.forex.robot on January 22, 2018, 09:23:40 PM
https://www.nzbn.govt.nz/search-the-nzbn-register/nzbndetails#search=3945518&details=9429030560239

Registered Address - Suite 6 :) :) :)

Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: reinerh on January 22, 2018, 10:28:41 PM
https://www.nzbn.govt.nz/search-the-nzbn-register/nzbndetails#search=3945518&details=9429030560239

Registered Address - Suite 6 :) :) :)

its a binary broker, they are all scams.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: slimboydim on January 22, 2018, 11:29:43 PM



its a binary broker, they are all scams.


While I don't trade Binary Options, are you saying any broker
that offers BO are a scam?
If so that's a very bold statement...





Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: deathlord on January 23, 2018, 12:54:12 PM
About 43k USD at this moment and I know a trader who holds almost 100k with them and is in the same situation.
Well, don’t you think that someone Trading these amounts should consider such aspects of a business relationship before making an investment under these conditions?

Of course you would have enough money to get a lawyer and have the situation reviewed by a professional instead of asking Dr. Internet


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Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Faithblaster89 on January 23, 2018, 02:25:11 PM
About 43k USD at this moment and I know a trader who holds almost 100k with them and is in the same situation.
Well, don’t you think that someone Trading these amounts should consider such aspects of a business relationship before making an investment under these conditions?

Of course you would have enough money to get a lawyer and have the situation reviewed by a professional instead of asking Dr. Internet


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Well, they had to add this condition to their ToS recently while we were already registered with them.

Suing them is one of the options that is already on the table.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Trunk on January 29, 2018, 04:27:44 PM
Me and few other traders are in a very unconvenient situation with GDMFX. They claim that based on their ToS, they have right to hold our funds (profits and even the withdrawals) for up to 6 months, because our positions exceeds 1000 pips move during 48 hours and they call this "extreme volatility". With this excuse, they hold our funds since end of October (3 months already) and they are not able to explain why they dont return at least our deposits. We traded USDTRY and there a move of 1k pips during 48 hours is nothing unusual, while just opening spread was about 60 pips. Basicaly their message to traders is "Open a trade and pray that it will not move a lot in your favor, because then we can (and very likely we will) hold your money for up to 6 months and you will not be able to do anything during this period".

Do you think guys this is legal? At least it is pretty unethical by my opinion.

Here is the condition Im talking about from their ToS:

Service Interruptions due to Extreme Market Conditions
Under certain extreme market conditions, it is possible for the price of a trading instrument offered by GDMFX to change drastically within a short timeframe, leading to significant profits or losses for all customers who are engaged in trading with the said instrument or its derivatives. In order to guarantee the stability of its systems and liquidity, GDMFX shall reserve the right in all cases when the price of a trading instrument changes by 1000 pips or more, within 48 hours, to temporarily suspend, or delay certain Services to some or all of the customers whose accounts or trading positions have been affected. Such interruptions might be applied to some or all of the following services: deposit processing, withdrawal processing, internal transfer processing, or order processing for any period deemed necessary by the company, but not longer than 6 months from the date of the market event.

Is this volatility applied to all trading pairs? Its common thing to see such volatility on exotics I think they are just looking for excuse to take away your profit and acted unfairly in your situation.

Had many times trading activity on Hotforex with such volatility and even more and it passed without any issues, profits and losses all is fine. Probably it depends from broker to broker.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Faithblaster89 on February 05, 2018, 09:52:10 PM
Yes all pairs, it is hardly suspicious. At the beginning of the withdrawal problems, they claimed that their liquidity provider didnt pay them. Now they claim that the trades were made on bad prices, but this is total BS. The prices were normal, I compared to other brokers. By my opinion, they are going to escape with clients money. At least we have their names so we can easily report them to police organs.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Hilapur on January 28, 2019, 01:52:17 PM
I can understand that they could stop trading an instrument in case of disruption on the market which implies huge price movements. In this case to keep clients fund for up to 6 months does not make any sense.This is why I find extremely crucial to read all available documents when choosing a broker
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: FxTS on February 04, 2019, 06:59:19 PM
The broker could not impose restrictions on withdrawals.
In such case, the best way is to collect all documents, screenshots and everything else could be helpful and contact lawyers. They will help you to communicate with the broker and regulator and get your money back. The wi rate of such disputes is very high, the broker would rather return your money back than deal with regulator.

By the way, it works even if the broker is incorporated somewhere like BVI or Curaçao.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Eliza Abrams on February 05, 2019, 02:49:53 PM
Whether it is legal or not depends on the jurisdiction where the broker is licensed and regulated and the regulator that enforces that regulation.

For example, regulators like the British FCA (https://www.forexbrokerz.com/news/risks-trading-offshore-forex-broker) even have compensatory schemes in case a broker goes under or turns out to be a scam.

I don't know where your broker is regulated or if it is regulated at all, so I cannot tell you whether what they are doing is legal in their jurisdiction. However, such a practice sounds extremely shady to me. Trustworthy brokers do not hold onto their clients' money when clients wish to withdraw them, period.

Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: forexrupees on February 06, 2019, 08:46:04 AM
its neither legal nor any broker do this type of thing.
I have been trading forex since years but i have never face this issue is my entire carrier.
none of the brokers is gonna do this to any of his client because this is against the policy .
The capital a trader deposits to his account is his own money he can withdraw his amount at any time all he have to do is to verify his account before withdrawing his capital.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Eliza Abrams on February 06, 2019, 02:07:58 PM
Frankly, if a broker says they'd do this kind of thing just find another one. There are plenty of fish in the sea, figuratively speaking.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: drunkfx on February 07, 2019, 06:58:03 PM
Me and few other traders are in a very unconvenient situation with GDMFX. They claim that based on their ToS, they have right to hold our funds (profits and even the withdrawals) for up to 6 months, because our positions exceeds 1000 pips move during 48 hours and they call this "extreme volatility". With this excuse, they hold our funds since end of October (3 months already) and they are not able to explain why they dont return at least our deposits. We traded USDTRY and there a move of 1k pips during 48 hours is nothing unusual, while just opening spread was about 60 pips. Basicaly their message to traders is "Open a trade and pray that it will not move a lot in your favor, because then we can (and very likely we will) hold your money for up to 6 months and you will not be able to do anything during this period".

Do you think guys this is legal? At least it is pretty unethical by my opinion.

Here is the condition Im talking about from their ToS:

Service Interruptions due to Extreme Market Conditions
Under certain extreme market conditions, it is possible for the price of a trading instrument offered by GDMFX to change drastically within a short timeframe, leading to significant profits or losses for all customers who are engaged in trading with the said instrument or its derivatives. In order to guarantee the stability of its systems and liquidity, GDMFX shall reserve the right in all cases when the price of a trading instrument changes by 1000 pips or more, within 48 hours, to temporarily suspend, or delay certain Services to some or all of the customers whose accounts or trading positions have been affected. Such interruptions might be applied to some or all of the following services: deposit processing, withdrawal processing, internal transfer processing, or order processing for any period deemed necessary by the company, but not longer than 6 months from the date of the market event.

Simply they have to pay your profit from their pocket, because their dumb risk management guy forgot to turn off lira trading during high volatility, lol.

Or they simply failed to clear your orders with their counterparty (LP), because they turned off lira trading, while GDMFX guys already painted nice $$$ in your platform.

Finding guilty basically takes up to 6 months according their ToS and if you see a provision about cancelling profits from off-market trades, then they are likely to execute this option to cancel your profit.

The money you had before trade should not be affected I guess.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Nasdaq100 on February 08, 2019, 12:16:52 PM
@Drunkfx, how do I know if my broker has the the provision to cancel profits?

Is that something that they would mention somewhere in their website/business license , etc?
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Eliza Abrams on February 09, 2019, 02:19:58 PM
A transparent broker should absolutely have stated it on their website, but a lot of brokers, even regulated ones, aren't that transparent.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: reinerh on February 09, 2019, 07:41:54 PM
A transparent broker should absolutely have stated it on their website, but a lot of brokers, even regulated ones, aren't that transparent.

there is a lot of scam brokers out there, one must do big time research before sending away any money.

like most all binary ones are scam. plus alpari went bust, and they were quite reputable. so one needs to keep that in mind as well.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: iMusingKiMi on February 11, 2019, 09:06:03 AM
A transparent broker should absolutely have stated it on their website, but a lot of brokers, even regulated ones, aren't that transparent.

there is a lot of scam brokers out there, one must do big time research before sending away any money.

like most all binary ones are scam. plus alpari went bust, and they were quite reputable. so one needs to keep that in mind as well.

I still remember when you mentioned Alpari. Although they go bust, I still get my money back but it took quite couple of months.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: reinerh on February 11, 2019, 01:09:04 PM
A transparent broker should absolutely have stated it on their website, but a lot of brokers, even regulated ones, aren't that transparent.

there is a lot of scam brokers out there, one must do big time research before sending away any money.

like most all binary ones are scam. plus alpari went bust, and they were quite reputable. so one needs to keep that in mind as well.

I still remember when you mentioned Alpari. Although they go bust, I still get my money back but it took quite couple of months.

good regulation is certainly worth something :)

Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Eliza Abrams on February 12, 2019, 02:39:28 PM
True. Scams are a huge part of this sector, unfortunately. They are ubiquitous. For example, the UK has what is considered to be one of the most trustworthy regulators in the world, but even with their presence UK citizens have lost 197 million pounds to scams (mostly Forex scams) for 2018 alone.  (https://theforexreview.com/2019/02/08/uk-citizens-were-scammed-for-197-mln-gbp-in-2018-alone/)

Can you imagine what is happening in countries without such regulation?

Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: iMusingKiMi on February 13, 2019, 08:35:34 PM
A transparent broker should absolutely have stated it on their website, but a lot of brokers, even regulated ones, aren't that transparent.

there is a lot of scam brokers out there, one must do big time research before sending away any money.

like most all binary ones are scam. plus alpari went bust, and they were quite reputable. so one needs to keep that in mind as well.

I still remember when you mentioned Alpari. Although they go bust, I still get my money back but it took quite couple of months.

good regulation is certainly worth something :)

Straight to the point. But it wasn't a huge account. Not sure if they pay those with huge amount of balance.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Eliza Abrams on February 14, 2019, 12:11:23 PM
Regulatory compensatory schemes have a limit, so people with accounts above that limit likely couldn't be compensated fully.
Title: Re: Is it legal that a broker decides to hold all your money for up to 6 months?
Post by: Loperte on February 18, 2019, 09:01:06 AM
This is a very common and alarming situation. There are a lot of brokers that are doing this. I don't know whether this is legal or not. I think that you should contact the right representative to solve this issue. This shouldn't occur. This will discourage the traders to trade.