Is AvaTrade Legit and Safe?

Is AvaTrade Regulated?

AvaTrade holds licenses from regulatory bodies across multiple continents, making it one of the more heavily regulated forex and CFD brokers for retail traders. Classification is based on BrokerListings.com’s regulator rating system.

Scam brokers do not typically have Category A authorization. These regulators generally require ongoing client fund segregation, strict capital requirements, and independent audits. Retail clients under the CBI’s and CySEC’s MiFID II framework also have negative balance protection, helping to prevent traders losing more than their account balance.

5 Reasons AvaTrade Is Legitimate

1. Longevity: AvaTrade has been operating since 2006, giving it over 20 years of industry experience. Scam platforms usually appear, collect deposits for a few weeks or months, and then disappear (we know we’ve exposed scam brokers). AvaTrade has done the opposite, steadily expanding its regulatory presence over the past two decades.
2. Top-tier regulation: Brokers authorized by ‘Category A’ bodies require ongoing compliance, not just a one-time application fee. Keeping these heavy-hitting licenses active simultaneously shows a strong commitment to compliance.
3. Transparent pricing: AvaTrade publishes spreads, inactivity fees, and swap rates upfront. We did not find any hidden charges during our live testing, which has included placing dozens of intraday and swing trades. In contrast, many scam brokers we’ve evaluated are opaque about trading fees and have withdrawal fees.
4. Third-party feedback: AvaTrade generally receives positive ratings on other brokerage review sites. It also has a 4.8/5 rating on Trustpilot out of 12,650+ reviews – a substantial library of user reviews that would be hard to fake at that scale.
5. Reliable withdrawals: Card withdrawals are processed almost instantly, and e-wallets within 24 hours (we’ve tested them). There is also no ongoing pattern of withdrawal complaints on trader forums – the most common complaints we see of scam brokers.

Practical Risks To Keep In Mind

Even though we’re confident AvaTrade is a legitimate broker, no broker can be considered fully ‘safe’. Here are the practical risks to keep in mind and where AvaTrade trails the most trusted brokers:

• AvaTrade does not hold a banking license. Some brokerages like Saxo and Swissquote are also registered banks, providing extra legitimacy.
• AvaTrade is not listed on a stock exchange. Some brokers like Plus500 and IG are listed on stock exchanges, providing greater transparency.
• AvaTrade is not audited by one of the Big Four (Deloitte, PwC, EY, KPMG). External auditing by one of the most trusted accounting firms, which brokerages like Interactive Brokers and CMC Markets have, would provide extra reassurance about the firm’s financial health.
• AvaTrade has faced regulatory actions. Although it has a fairly clean regulatory record, it did reach a settlement in 2019 with the Ontario Securities Commission for offering CFDs without registration, resulting in a CAD $550,000 penalty, as well as facing a €165,000 fine from the CBI in 2014 for MiFID contraventions.
• Many retail accounts lose money trading CFDs with AvaTrade, often over 55%. This is disclosed prominently on the site in jurisdictions where such warnings are mandated, such as the EU. That said, the percentage of losing retail traders is lower than many retail CFD brokers, which typically hover in the 70% to 80% range.
• Clients with AvaTrade’s offshore entity should expect less regulatory protection. The BVI FSC-registered AvaTrade entity does not offer a compensation scheme and has fewer dispute-resolution options than e.g. CBI- or ASIC-registered entities.
• Watch for clone scams. Always access AvaTrade through the correct domain and verify the legal entity in your account documentation. The FCA has warned about ‘avaplustrade.co.uk‘, the CySEC has warned about ‘avacaptal.com‘, the FSMA has warned about ‘Avatradex‘, and the DFI warned about scammers impersonating Avatrade.com on social media.