Russian brokerage InstaForex is withholding funds deposited by clients who deposited using Liberty Reserve. However InstaForex are only withholding these funds temporarily for a total of 6 months until the end of November 2013, when traders will be able to withdraw only 50% of the funds deposited using LibertyReserve. InstaForex’s response is different from other brokerages who have been caught up in the collapse of LibertyReserve, who have honored their clients deposits even though the brokerages may have had money tied up in Liberty Reserve themselves. Examples include xemarkets among others.
However the situation is even worse as in order to withdraw funds deposited by LibertyReserve traders at InstaForex are required to keep their accounts active in the six months between now and the end of November. Some users of the MT5 forums (owned by InstaForex) have been kicking off about this and I feel they are right to be annoyed. It seems highly unfair that users who deposited with LibertyReserve are going to be denied the ability to remove their funds for six months and then not be able to withdraw the full amount. Some have cried out that this an example of InstaForex money grabbing after the collapse of LibertyReserve, the brokers official response will be that they had a lot of money tied up in the LibertyReserve system. This response is not at all adequate in my opinion.
This is why, I always recommend that individuals trade with regulated brokerages, otherwise your much more at risk at having things like this happen to you. I feel this will further damage the already slightly poor reputation of Instaforex further leading to many to view Instaforex as a no go area. It will be interesting to see whether InstaForex survives the next six months, I have a feeling that they will but will ultimately lose a lot of business in the period and become a much smaller player than they once were.
- LiteForex Review (myfxbrokerreviews.wordpress.com)
- Instaforex Review (myfxbrokerreviews.wordpress.com)