MoonPay Review: What Is the Connection With Fake Brokers?

MoonPay is а crypto payment processor made to enable the easier purchase of digital coins. However, some scam brokers have decided to exploit it.

What is the connection between crypto payments and fake trading companies? Read our detailed MoonPay review to find out.

What is MoonPay, and Is It Regulated?

MoonPay is a crypto payment processor. You can use it to buy and sell crypto or pay for a certain service to merchants accepting crypto payments. In addition, you can purchase NFTs and launch your own Web3 initiative.

As per the question, is MoonPay legit? The answer is yes, in a certain scope of business. Namely, the company has obtained a regulation by the US FinCEN and is registered as Money Service Business – MoonPay USA LLC. 

In December 2022, the company obtained an FCA regulation for specific crypto-related operations. It’s registered as MoonPay (UK) Limited. Finally, for all the customers outside the US and the UK, this company has an offshore branch, registered as Eighteenth September Ltd. However, we were unable to find such a business on the FSA register, so we’re unsure if this entity is supervised and by whom.

Therefore, the company obliges to specific anti-money laundering laws and is regulated to conduct business in specific areas. Yet, the US license doesn’t grant them the right to deal as money transmitters of virtual currencies such as BTC. Additionally, they cannot offer trading in securities, as they’re not under an SEC license.

Who Are MoonPay.com Customers?

MoonPay is advertising its services all around the globe. According to web traffic analysis, the majority of their customers come from:

• US,
• UK,
• Nigeria,
• France,
• Germany.

The moonpay.com website was registered in 2010, and the company officially started its operations in 2019. Ever since, they’ve been introducing their clients to new updates and technologies for crypto purchases.

Traders’ Reviews – Experience With MoonPay Wallet

The company has quite a solid reputation for its own services. For instance, we found 71,712 reviews on Trustpilot at the time of writing, with the company being rated great. Users of Reddit have somewhat mixed experiences, as some of them claim to be charged, while their account is not funded with crypto.

However, our biggest concern is the company’s cooperation with fake brokers. Namely, we found many reviews indicating that MoonPay scammed clients while they actually transferred money to a fraudulent broker using MoonPay as a payment processor. 

How does the scam work? Let’s explain a bit more.

How Does Alleged MoonPay Scam Work?

MoonPay, as a payment processor, allows you to swipe your credit card or connect it to a TrustWallet, for instance, and transfer crypto from one wallet to the other. The issue here is that, just like with traditional payment processors, you never know when scammers have abused it.

For instance, you can deal with fraudulent, unlicensed brokers asking you to purchase crypto through the MoonPay app. Then, they will transfer the crypto to themselves without you understanding that you’re not the wallet owner. Or worse, they may send you a link with the wallet already there, ready for you to transfer money to swindlers’ pockets. We’ve found reviews indicating that one of the known scam brokers, IdealinvestFX, uses MoonPay for their scheme.

Once you receive your bank statement, you will see that the money has been transferred to MoonPay, which is enough to suspect the scheme. The worst part is that comments indicate that MoonPay support does nothing to help victims of these vicious scams or even help prevent them.

MoonPay Withdrawal Options

Once you decide to purchase crypto through MoonPay, the minimum order amount is 30 EUR or the equivalent in any other currency. There’s a vast list of available payment options, including:

• Debit/credit card,
• Apple Pay,
• Google Pay,
• SEPA transfer,
• UK Faster Payments
• YellowCard Nigeria,
• PIX Brazil.

For US residents, only the first three options are available. 

When it comes to withdrawals, the situation complicates a bit. Namely, each big digital coin has its own minimum selling amount, e.g., 0.0015 BTC or 0.025 ETH. In addition, bank transfer withdrawals are only possible in the UK, the EU, and the US if your account accepts FPS payments, SEPA, or ACH payments, respectively.

What Can I Do If I Was Scammed Through MoonPay?

You could contact the company directly and submit all evidence if you have been scammed through MoonPay or any other crypto payment processor. However, there’s a high chance that scammers have already transferred your digital coins to another wallet. Therefore, you must provide all the necessary documentation for the fund transfer.

If you feel like this is a daunting task, you can always contact our CipherTrace experts. They can help you track and trace your crypto and find the money’s final destination. Then, you can file the report with the authorities and law enforcement. Book a free, non-obligatory consultation today!

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