Investigation: Is XS.com Scam?

One of the biggest forex/stocks brokers on the Internet, but is it deserving of its status?

Today I review XS.com, the CFD broker, one of the trademarks of XS Group. Established in Australia in 2010, it is, according to multiple sites, one of the largest and most popular brokers online, but is it deserving of the trust and respect it received? I examine a few key facts and metrics.

One of the most important things about brokers — the licenses that they have.

In this department, XS.com is not struggling. In fact, it is one of the few brokers that has ASIC regulation (the Australian Securities and Investments Commission). ASIC is considered to be rather strict and consumer focused. It is one of the more effective and brutal regulators, even compared to European and South African ones.

For example, just this March ASIC had already levied a $10.5 million fine against one of the brokers over an unrelated breach of integrity rules supporting liquidity. And in 2022–2023 fines imposed onto brokers by ASIC amounted to more than the sum of the industry levies imposed over the same period. It earns about $300-$400 million per year just from fines on the financial entities alone (in 2017–2018 it was $155 million, the fines are actually growing quite rapidly).

More importantly here, XS.com never received a fine from ASIC, it is one of the few brokers that is fully compliant. It operates, and even excels in this case, under strict regulations. XS.com is also additionally licensed by the FSA, CySEC, LFSA, and others…

There are no bad signs in this regard. The company is trusted by many big legal bodies who do not care about upsetting the status quo. In fact, just this year ASIC excluded more than 10 brokers and prohibited them from operating in the country. Needless to say, XS.com doesn’t seem to have a bad standing with them at all.

Safety features

My trading window in MT4 Webtrader, testing

Main trading platforms at XS.com are Metatrader 4 (listed in my screenshot above) and Metatrader 5, which is somewhat relevant because MetaQuotes, the developer of these 2 platforms, does preliminary research about its brokers, and if it was obvious to them that XS.com is scam, they would not license their software to them.

More important safety feature is the insurance XS.com provides. Usually brokerage insurance covers only up to $10,000 in lost funds, but XS raises that to $5,000,000 — in case of any loss that wasn’t a direct result of the trading. This is one of the largest insurances I’ve seen with an online brokerage.

There also seems to be no signs that I could find of XS.com scam accusations or widespread client review bombing online. Which is a rather good sign as well, a very important one.

Funding methods

Sometimes these can give a big clue. Like, if the broker only accepts cryptocurrency, and doesn’t want to engage with real money at all. Might point to them using proxies or ‘mules’, and being fully illegal in general.

In this regard, XS.com fares decently well. There are bank funding methods, as well as e-wallets and even local payment methods for certain countries, a somewhat infrequent visitor in the brokerage payment sphere. There are also no fees on deposits/withdrawals, and the payments are going out to the same legal entity as the one visible on the website, which is rather important.

Overall, broker seems legitimate, if I missed anything, feel free to add/correct me in comments.