Disclosure: Short PLUS. This content is not directed toward persons with residence or place of business in the United Kingdom. By accessing, transmitting, or reviewing this material, you acknowledge that the author has represented his honest opinion and made statements of fact believed to be true at the time of publication. No content herein should be construed as a recommendation to take action with respect to any security.
Part 1: Short Plus500
Part 2: Bucket Shop
Part 3: Customer Lifetime Value
Part 4: Companies House Inconsistencies
Part 5: Audit Opinions
Part 6: Unlicensed Activity
Part 7: Whois Plus500?
Part 8: Scalping
Part 9: Worldwide Web
Part 10: Competition
Part 11: Unanswered Questions
Part 12: Legal Consequences
Successful traders at Plus500 often complain of difficulties withdrawing funds. Plus500 has in some cases tried to void profitable transactions, even in jurisdictions where it is operating outside the law.
There are numerous examples of users discussing their experiences with Plus500 online. One trader complained that his account was frozen for ‘scalping’ after he generated profitable trading activity in February 2015. Scalping is referenced in section 24.1.3 of the user agreement, but it is not clearly defined. Even though most Plus500 trades have a duration measured in minutes, according to the company’s own data, the user agreement contains the clause “a significant number of transactions with short duration may be deemed as Market Abuse” giving the company wide latitude to reject any profitable trading activity.
I have no way to assess the merits of individual claims, but making it more difficult to withdraw funds when customers are profitable would be broadly consistent with a business model designed to ultimately separate customers from their deposits.
As a concrete example of Plus500 operating outside of legal bounds, consider one such complaint by a customer in Singapore. I contacted the individual in question and learned only that he eventually received “his money back” after a delay of several months. I will update this post if I learn more about his experience. However, what is more remarkable is that Plus500 was operating in Singapore in the first place. The domain www.plus500.sg redirects to Plus500.com. Yet Singapore has very clear prohibitions against bucket shops.under the Commodity Trading Act (see note 14). It should be uncontroversial that operating a bucket shop in Singapore is illegal.
Separately, it may be worth examining the transaction record posted by the customer. I’ve uploaded a version so there’s no need to register on the Forex Peace Army website. To my eyes, the BTC trades look like very fortunate trading during a period of extremely high volatility in the underlying instrument. Perhaps Plus500′s software was slow to catch up to market developments. The nice thing about Bitcoin is that there is a blockchain transaction record that covers every transaction on every major BTC exchange. It should be possible to compare the customer’s transactions to the historical record and draw your own conclusions, if desired.