why do people knowingly trade with unregulated brokers?

@andy_colgate_nottinghill - 6 months ago - Forex Brokers

I see so many of my friends trading via unregulated brokers and it got me thinking, what is the allure? what do people tend to gain from trading with these unregulated brokers?

@tony_xhan - 6 months ago

Unregulated brokers are not as strict especially during account opening documentation (they even accept expired means of ID) and this can cause people to want to open an account with them.

Some unregulated brokers may not even enforce money laundering controls thereby allowing traders fund their account from an account in a different name from their own. This also contributes to why people are drawn to unregulated brokers.

Some people may be aware of the risks of losing money to an unregulated broker but since they trade little capital they reckon they can take the loss.

However, the dangers of an unregulated broker are enormous, they can decide to close shop whenever they please, they can decide to reverse any profits you have made for no tangible reason, they can even open unauthorized trades on your account and make sure you lose.

@weilo_daniel - 6 months ago

Many people patronize unregulated brokers because these brokers pass through celebrities and social media influencers to sell their brand. Unsuspecting victims usually assume that for their celebrity crush to be supporting a broker then the broker must be regulated,

Unfortunately, this is seldom the case as most of the celebrities will support just about anything for a quick buck.

I mean I have even read about unregulated scam forex brokers who sponsored premier league clubs like Chelsea so imagine that Chelsea fans were going to trust this broker eben without reconfirming if they were regulated.