Chaohuan Finance Limited – Can You Trust Them?

Website URL: https://chaohuanfx.com

Founded: 2021

Regulations: Not Regulated

Languages: English, Chinese

Deposit Methods: Wire Transfer, USDT

Minimum Deposit: Unknown

Free Demo Account: N/A

Number of Assets: N/A

Types of Assets: Precious Metals, Energy, Stock Contracts, Stock Index Contracts, Currencies, Cryptocurrencies, Futures

Trading Accounts and Conditions

Chaohuan Finance Limited offers their clients the following trading accounts: the Mini Account, the Standard Account and the VIP Account. The trading conditions for all the three account types are the same – and incomplete. We are told that the leverage ratio ranges from 1:1 to a maximum of 1:400 and that the minimum trading lot size is 0.01 mini hands.

You are allowed to make 24*7 online transactions, and you are allowed an unlimited number of orders per account.

There is no mention of spreads and we also do not know what the minimum deposit requirement is. We also do not know the commissions and fees charged by this broker. We did check the broker’s platform and found out that Chaohuan Finance Limited was offering spreads that started at 0 pips for the EURUSD pair.

Chaohuan Finance Limited – Advantages

The only positive we found about Chaohuan Finance Limited was the fact that this broker offers the excellent MetaTrader 5 trading software. This software is currently the best in the world, and has a wide range of tools for analysis and charting (market indicators, various chart types, times frames and so on), automatic trading options, market trackers and so on.

So, finding a genuinely licensed MT5 product with this broker was a pleasant surprise.

Chaohuan Finance Limited – Disadvantages

Given below are the many disadvantages we have found with this broker.

• Lies About Regulation Status

On their home page’s footer, Chaohuan Finance Limited claims to be regulated and authorized by the National Futures Association, with the license number 0546473. The broker also claims to be licensed by the US MSB (US Money Services Business), and authorized and regulated by the FinCEN (Financial Enforcement Bureau).

Both these claims contain links and when you click on them, you are shown a PDF document of certificates that verify the broker’s claims, The address provided in the authorization letter from the MSB is a Hong Kong address.

The broker, on their Contact Us page, has only an email ID given. And then there is a world map, with offices in 13 locations highlighted on that map.

It all looks very legitimate when you glace through the details. However, here are all the red flags that tell us that this broker is telling a bold-faced lie about their regulation status.

The claims of regulation are lies. Both the NFA and the FinCEN do exist and are connected with the Forex market. However, the FinCEN is the body that is responsible for monitoring and preventing financial crimes such as tax evasion, money laundering, and so on. And while the NFA is one of the authorities that regulates forex brokers, to operate legally, brokerages need to be regulated by both the NFA and the CFTC (Commodity Futures Trading Commission).

Furthermore, the license that this broker provided for the NFA registration did not look authentic, so we decided to check the online register of the NFA to see for ourselves. We were not surprised to find out that there was no company or broker by this name listed with the NFA.

Thus, Chaohuan Finance Limited has forged the copies of their licenses in an effort to fool customers into thinking that they are regulated. The reality is that this broker is operating illegally and is a scammer.

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• No Legal Documents

We went through Chaohuan Finance Limited’s website thoroughly and could not find any legal documents anywhere. They have a page that says Legal Document, but when you click on it, the page is empty.

This is another huge red flag that tells us that this broker is a scammer. Legitimate brokers have detailed legal documents, specifying each single term of service and policy the broker has. The lack of these documents means that if you sign up with this broker, then can do what they like with your funds and your personal information and there will be nothing you will be able to do to protect yourself – or get your money back if you are scammed.

• Issues with Trading Conditions

While the trading software offered by Chaohuan Finance Limited is above reproach, their trading conditions aren’t. The first thing we noticed (as we mentioned earlier in our review), the trading conditions this broker has presented are incomplete. Spreads are not specified and neither are minimum deposit amounts.

We accessed their MT5 platform to check, and found that the spreads were set at 0.0 pips – which raises a red flag. A broker offering a zero-pip spread will either have extremely high commissions or is running a loss-making venture. Or, they are manipulating the spreads to entice customers into investing with them.

The leverages are also too high. In the UK and Europe, brokers cannot offer a leverage of more than 1:30. It’s the same in Australia. In Hong Kong, that leverage is capped at 1:20 and in the US, it’s 1:50. So, a leverage of 1:400 is illegal in almost all the jurisdictions that this broker is targeting.

And since we do not know what the commissions and fees are, we don’t really know the actual cost of trading either.

• Limited Payment Options

While we were unable to actually carry out transactions ourselves, we saw that there were only two payment options provided – USDT and wire transfer. Both these payment options are irreversible and permanent, which means that once your money is gone, there is no way for you to get it back. 

Conclusion

Chaohuan Finance Limited is a scam broker that has lied about their regulation status, trading conditions and all the points that matter. Having a genuine MT5 platform is not enough to cover up these red flags. This broker must be avoided.

Chaohuan Finance Limited

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