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Essential25-30 minLesson 4Scam Check

How to Verify a Trading Project — 5 Stages in 30 Minutes

A reproducible due-diligence protocol with the actual registers (FCA, ESMA, NFA, Companies House, OpenSanctions, Myfxbook) you need — and the specific red flags at each stage that send you home.

Last reviewed: 2026-05-20

Choose your reading depth — content adapts, URL stays the same.
This course is being reworked. The lesson below is the v1 draft; we're rewriting Scam Check with a friendlier, less alarmist voice. New version coming soon.
Quick answer
Run five sequential checks: (1) Identity — companies register + UBO + sanctions; (2) Regulatory — search the regulator’s own register for licence + scope + warnings; (3) Team — reverse-image, LinkedIn, prior employment; (4) Track record — read-only Myfxbook / FX Blue link covering 100+ trades; (5) Community — Reddit, Trustpilot 1-stars, FPA scam alerts. Any red flag in stages 1 or 2 means stop immediately. The whole protocol takes 30-60 minutes and prevents 95 %+ of retail trading fraud.
TL;DR — 60 sec

5-stage protocol · 60 seconds

  1. Identity — Companies register lookup + UBO + OpenSanctions
  2. Regulatory — FCA / NFA / ESMA register, licence + scope + warning list
  3. Team — Reverse-image, LinkedIn, employment history
  4. Track record — Read-only Myfxbook / FX Blue link, 100+ trades
  5. Community — Google + Reddit + Trustpilot 1-stars + FPA blacklist
Stop rules: any red flag in Stage 1 or Stage 2 = walk away immediately. 3+ flags across all stages = high risk, do not deposit.
Standard lesson body

The 5 stages, in order

Sequential, not parallel. If a stage uncovers a hard red flag, you stop — there is no point checking the team of a fake entity. Each stage below names the exact public registers + tools to use.

1Stage 1 — Identity verification
Goal

Confirm the company you are about to send money to is a real legal entity, and identify who actually owns it.

Steps
  1. Find the registered company name on the website footer or T&Cs (not the marketing brand).
  2. Look up the company in the relevant national companies register.
  3. Note the registration date — < 1 year old is high risk; < 3 months is very high risk.
  4. Identify the directors and the ultimate beneficial owner (UBO).
  5. Cross-check the UBO against international sanctions and PEP (politically exposed persons) lists.
Tools / registers
  • Companies House — UK
  • OpenCorporates — Global
  • SEC EDGAR — US
  • OpenSanctions — Global
  • Bundesanzeiger — Germany
Stage-specific red flags
  • No registered company name disclosed anywhere on the site.
  • Company is < 3 months old but already advertising big returns.
  • UBO is hidden behind shell companies in multiple jurisdictions.
  • Directors appear on a regulator warning list or in an OpenSanctions hit.
2Stage 2 — Regulatory verification
Goal

Confirm the firm is actually licensed by the regulator it claims, in the scope it claims (forex / CFDs / asset management / crypto).

Steps
  1. Note the claimed regulator + licence number from the broker's site.
  2. Go DIRECTLY to the regulator's website (not via any link from the broker).
  3. Search the licence number or company name in the regulator's public register.
  4. Verify scope of activity matches the offering (forex, CFDs, managed accounts, crypto).
  5. Check 'appointed representative' — if the firm is only an AR of another regulated entity, you have weaker protection.
  6. Search the regulator's warning list for the firm name OR similar look-alikes.
Tools / registers
  • FCA Financial Services Register — UK
  • ESMA Investor Warnings — EU
  • NFA BASIC — US futures/forex
  • CFTC RED List — US — Registration Deficient
  • BaFin — Germany
  • ASIC Connect — Australia
Stage-specific red flags
  • Licence number returns no result on the regulator's register.
  • Firm is registered for a different scope (e.g. 'corporate services' but advertises forex managed accounts).
  • Firm name appears on the regulator's warning list.
  • Regulator is an offshore name with no real enforcement (Saint Vincent, Vanuatu, Marshall Islands).
  • Firm is 'appointed representative' of a regulated entity but the AR scope is narrower than what's being sold.
3Stage 3 — Team verification
Goal

Confirm the people behind the project are real, with verifiable prior employment and credentials.

Steps
  1. List the named founders / CEO / portfolio managers from the website.
  2. Reverse-image search each headshot via Google Images, TinEye, or Yandex.
  3. Search each name on LinkedIn — verify employment history, mutual connections, posting cadence.
  4. Cross-check claimed prior employers (e.g. 'ex-Goldman Sachs') against LinkedIn AND that firm's alumni database where possible.
  5. Google '<full name>' + scam / fraud / lawsuit / warning.
Tools / registers
  • Google reverse image search — Global
  • TinEye — Global
  • LinkedIn — Global
  • PimEyes (face search) — Global
Stage-specific red flags
  • Headshot is a stock-photo or reverse-resolves to other 'CEO' / 'founder' pages.
  • No LinkedIn profile, or the profile is < 6 months old with < 50 connections.
  • Claimed prior employer cannot confirm the person worked there (or the role didn't exist).
  • Personal news search returns warnings, regulator actions, or unresolved lawsuits.
4Stage 4 — Track record verification
Goal

Confirm any trading results are independently auditable — not edited screenshots or self-published dashboards.

Steps
  1. Demand a read-only third-party tracker link (Myfxbook, FX Blue, FXBook) covering ≥ 12 months.
  2. Verify the tracker is set to public read-only API mode (not 'broker statement upload', which is forgeable).
  3. Inspect: total trades (> 100), win rate, average R, profit factor, max drawdown, longest losing streak.
  4. If audited returns are claimed, find the auditor's name + ICAEW/PCAOB/IFAC membership and contact them.
  5. Match the equity curve's drawdowns to real market events (Q1 2020, Feb 2018 vol spike, etc.) — drawdowns that don't match real volatility are fabricated.
Tools / registers
  • Myfxbook — Global
  • FX Blue — Global
  • ICAEW Find a Chartered Accountant — UK auditors
  • PCAOB Registered Firms — US auditors
Stage-specific red flags
  • Refuses or stalls on a read-only tracker link.
  • Tracker is 'manual statement upload' rather than read-only API.
  • Track is < 100 trades or covers < 6 months.
  • Equity curve is suspiciously smooth or drawdowns don't match real market events.
  • Auditor name doesn't appear in the relevant professional body's register.
5Stage 5 — Community signal triangulation
Goal

Cross-check what the firm tells you against what the global retail community is reporting in independent forums.

Steps
  1. Google '<firm name> scam' / 'review' / 'withdrawal' — read past page 1 for genuine signal.
  2. Search Reddit r/Forex, r/CryptoCurrency, r/Scams for the firm name.
  3. Check Trustpilot critically — read the 1-star reviews specifically (they usually have detail; 5-stars can be bought).
  4. Check FX-related scam databases (FPA Scam Alerts, BrokersView).
  5. Look for recurring patterns in complaints (withdrawal denials, account closures, missing funds).
Tools / registers
  • FPA Scam Alerts — Forex
  • Trustpilot — Global
  • Reddit r/Forex — Global
  • Reddit r/Scams — Global
Stage-specific red flags
  • Same recurring complaint across multiple platforms (e.g. withdrawal denial).
  • 5-star reviews are all dated within a 2-week window — suggests a bought review campaign.
  • All criticism is met with identical aggressive lawyer-letter responses.
  • Firm appears in FPA Scam Alerts or BrokersView blacklist.

Key terms

Definition
UBO (Ultimate Beneficial Owner)
The natural person who ultimately owns or controls a legal entity, directly or through chains of ownership. Anti-money-laundering regulations (EU 4th/5th/6th AML Directives, US FinCEN beneficial-ownership rule) require firms to identify and disclose their UBOs. A hidden UBO is a major red flag.
Definition
Appointed Representative (AR)
A firm authorised to carry out regulated activities under the umbrella of a directly regulated ‘principal’. The principal is responsible for the AR’s actions, but the AR’s permitted scope can be narrower. FCA register entries clearly mark AR status; investor protection differs from dealing with the principal directly.
Definition
Sanctions / PEP screening
Cross-checking individuals or entities against international sanctions lists (US OFAC, UK HMT, EU consolidated list) and politically-exposed-persons databases. Standard part of any financial firm’s KYC. Aggregators like OpenSanctions consolidate these for free.

Risk grading

After running all five stages, count red flags and classify the project. Stages 1-2 (Identity, Regulatory) are necessary conditions — any flag there forces a HIGH grade regardless of how clean stages 3-5 are.

Low risk
Threshold: 0 red flags across 5 stages
Action: OK to start with a small live account ($100-500). Continue monitoring.
Medium risk
Threshold: 1-2 red flags total, none in Stages 1 (Identity) or 2 (Regulatory)
Action: Consider staying on demo only. If you proceed live, cap at < $100 and treat as expendable; do not scale.
High risk
Threshold: 3+ red flags, OR any red flag in Stage 1 / Stage 2
Action: Do not deposit. Tell anyone in your network considering this firm what you found.

Worked example — verifying “Elite Forex Capital”

Hypothetical pitch: “Elite Forex Capital — UK-based, FCA-regulated, founded by ex-Goldman Sachs traders. Track record: + 47 % last year, 8 % max drawdown, audited by Big Four. Telegram VIP signals + managed account.”

  1. Identity: Companies House search → no ‘Elite Forex Capital’ in active registrations. Only dissolved company with same name from 2019. → Red flag.
  2. Regulatory: FCA Register search → returns no result. Site shows licence “FRN 999999” → also no result. → Red flag.

    At this point, stop. Stages 1 and 2 both failed. Grade: HIGH RISK — do not deposit.

  3. (Skipped: Team, Track record, Community.)

Total verification time: ~ 4 minutes. The brand name + “ex-Goldman” + “FCA” language gets the marketing-attention; the registers tell the truth.

Guided practice — pick one real firm + run the protocol

Real-world task
Choose any broker or signal service you’ve heard advertised — ideally one you were tempted by. Open the registers above in tabs. Run all 5 stages and record red flags. Total time: 30-60 minutes. Save your findings in the journal below.

Independent practice — open these registers

Three real public registers / databases — open them and confirm you can find a familiar firm or look up something.

FCA Register

Search 'Hargreaves Lansdown' — large UK firm, verify scope.

Companies House

Look up any UK firm's directors + filing history.

OpenSanctions

Search any public name for sanctions hits.

How FxRobotEasy public track record handles this

Manual: demand identity, regulator, team, audited track, community sanity — the 5 stages above, every time, for every firm.

Our reference: the FxRobotEasy public-results page lists our registered entity, an open live trade feed, named team members with verifiable profiles, and our regulatory disclosure — the same artefacts the protocol asks for. We’re showing what a project that *passes* all 5 stages looks like, not asking you to deposit anything yet.

When manual wins: always. Run the protocol on every firm — including ours.

Verifiable live trades + audit history — what an honest offer looks like.
See live results →

Mastery check

Seven questions on the protocol, the registers, and the difference between strong vs weak verification signals. Pass at 6 of 7 (~ 80 %).

Verification Mastery Quiz

Test your understanding with 7 questions. Pass with 6/7 correct.

Reflect

Reflection

Type your honest answers — saved on this device only. Use them next week to spot patterns in your trading thinking.

Pro deep dive

Deeper digging — when the basics aren’t enough

UBO discovery through shell-company layersPro

Sophisticated frauds layer ownership through multiple jurisdictions (e.g. UK Ltd → Cayman holdco → Seychelles foundation). OpenCorporates + the EU’s 5AMLD-mandated UBO registers (gradually re-opened to journalists/CSOs after the 2022 ECJ ruling) let you trace ultimate ownership. ICIJ’s Offshore Leaks database is a free aggregation of the Panama / Paradise / Pandora Papers — search any UBO name there to see if they appear in leaked offshore structures.

Final notices and enforcement actionsPro

FCA, FINMA, FINRA, and other regulators publish final notices and enforcement actions on their websites. A firm with multiple final notices in a 3-year window is functionally untrustworthy regardless of any other signal. Use the regulator’s site search rather than third-party aggregators.

Broker rating-agency caveatsPro

Sites like ForexBrokers.com, FXEmpire, Investing.com rate brokers — but many earn affiliate commissions from the same brokers they rate. Treat them as one data point, not a verification. The independent regulator register + named-auditor confirmation + read-only track record are the only signals immune to affiliate distortion.

On-chain verification for crypto projects

Smart-contract and token forensicsPro

For crypto projects: read the smart contract on Etherscan / BscScan; check whether contract is verified, who can call privileged functions (mint, pause, owner-transfer), what the token distribution looks like among top-10 holders, and whether the liquidity pool is time-locked. Tools like RugDoc, TokenSniffer, and de.fi’s scanner automate the first pass.

Wallet labelling and money-flow analysisPro

Public block-explorers + Chainalysis-flavoured tools (Arkham Intelligence, Nansen, MetaSleuth) let you label addresses (exchange, mixer, sanctioned, scam-reported) and trace money flow. A project receiving funds from a mixer or a tornado-cash address is a strong signal; a project funded entirely from a single fresh wallet with no history is another.

Bibliography & further registers

  • ICIJ Offshore Leaks Database
  • FATF — money-laundering typologies
  • EBA — AML/CFT guidance (UBO disclosure)
  • OpenSanctions — all consolidated sanctions + PEP lists
Pro practice
Maintain a personal verification log — date, firm, stage results, decision. Six months in, patterns emerge: the same suspicious operators recycle brand names + UBOs across new shell entities. Your log spots the recurrence before the marketing layer does.
Recall card — review in 1 week
Recall the 5-stage verification protocol in order, plus the hard stop rule.
Show answer

(1) Identity — Companies register + UBO + OpenSanctions. (2) Regulatory — regulator's own register, licence + scope + warnings. (3) Team — reverse-image + LinkedIn + employment cross-check. (4) Track record — read-only Myfxbook / FX Blue, 100+ trades. (5) Community — Google scam + Reddit + Trustpilot 1-stars + FPA. Hard stop: any red flag in Stage 1 or Stage 2 means walk away immediately, regardless of how clean the other stages look.

Next: Why FxRobotEasy is different

Educational material only — not investment advice. Trading carries risk of capital loss. Always practice on demo and use a stop-loss. ← Back to Scam Check