A Italian Trader's Withdrawal Declined by Etoro

Forex trading is often associated with lucrative returns, and that's true when done carefully. However, the market is also known for its miseries typically linked to the conduct of forex brokers and exchanges. While brokers get reported for various other problems, eToro often receives critics for its withdrawal issues.

Trader’s Account Blocked and Withdrawal Declined by Etoro

Here is a case reported on a forum and it says a member "DavideItaly" claimed to be scammed by eToro for €72043. While explaining the issue, the client who who is Italy and now lives in Spain disclosed that eToro blocked his access to the platform on account of suspecting illegal deposits. However, after receiving all the supporting documents and confirmation of the fund's resources, the company still seemed unwilling to unblock his account or process refunds. 

Davideitaly further stated that he had complied with all the rules and regulations of the company and completed all the necessary steps required for identity verification. While depositing funds with the company, he provided a copy of his grandmother's cheque in his name, confirming both the transference of the amount and the source of funds. The firm didn't raise any concerns initially, but they launched an investigation after six months which seemed to be coming out of nowhere. 

Based on his nationality, other forum members suggested that he should file his case with Commissione Nazionale per le Società e la Borsa (Consob) - the regulatory authority responsible for overseeing intermediaries operational inside Italy. However, CONBOS confirmed him that eToro doesn't fall under their territory after his resort. He was advised he can only try to escalate the issue to the major regulators across Europe and the UK, such as ESMA, CySEC and FCA. As of April 09, 2022, the client got back €24000 out of €72043. However, he wanted to have his all money refunded.

Summarizing the scenario discussed above, it is evident that eToro didn't act justifiably. If the company had suspected the client's source of investment, they shouldn't have accepted the deposits at first. Secondly, what's the point of launching an investigation after six months of registration? Third, if the company had to restrict the client's access, the client should have been asked well in advance to close off opened positions, so he doesn't suffer losses from adverse market movements. We believe had the broker been based in Italy, it could have lost its license to operate amid the validation of such accusation. 

Hence, it is worth mentioning that it is not always the illegal company behind every scam, but well-regulated entities like eToro could also play unfair. 

How Can You Avoid These Situations?

First of all, clients should prefer signing up with a company having regulations in their home country. For instance, if you're residing in Europe, you should always register with a company regulated by European Securities and Markets Authority (ESMA) or the Cyprus Securities and Exchange Commission (CySEC). Likewise, UK-based clients should opt for FCA regulated entities. These are the most reputable regulatory bodies across Europe & UK and can make things easier to prosecute if their regulated company breaches the code of conduct.

Secondly, clients should get their accounts verified before depositing any funds. Also, defining stop-loss for all of your positions is crucial. So even if the broker restricts your access, 

your positions get automatically closed after reaching a certain level. 

Lastly, read the terms and conditions carefully and understand the withdrawal policy thoroughly before signing up with any broker. If you know how the business works, you'll have fewer troubles with things like withdrawals.