Mercatox: Victim of Scam or Fraudulent Exchange?

Welcome to our Mercatox Review, in which we investigate the current website at mercatox.com.

Did they scam you? Please let us know by commenting below, and we will offer you free advice.

Recently, one of our partners received the following complaint from a person who reported being scammed for almost $20K:

I have invested a principal amount in the Mercatox mobile app. With assistance from a broker named Elena Mengli, I have grown the initial principal to a total of $197,135 in funds on Mercatox. Now, they are demanding that I send $32,000 to them in order to withdraw any money from the site. They have also warned me that my funds will be frozen.

So, what is Mercatox, and is it a SCAM?

Mercatox.com Review

The domain mercatox.com was registered through CSL Computer Service Langenbach GmbH d/b/a joker.com on October 12, 2015, updated on October 10, 2022, and is set to expire on October 12, 2024.

It is protected by Cloudflare and Domain Privacy Services provided by IDPS International.

On SimilarWeb, we find the following information:

• Description: “mercatox – universal market platform. digital and crypto-currencies exchange, multi currency e-wallet, payment service, lending to traders, peer-to-peer currency exchange”
• Company name: MERCATOX LTD
• Employees: 51 – 200
• Headquarters: United Kingdom, Nicosia
• Global Rank: #233,729
• Country Rank: #25,913 (India)
• Category Rank: #572 (Finance > Finance – Other; in India)
• Total Visits: almost 200K (in July 2023)

On SEMrush, they have an Authority Score of 30% with more than 95K backlinks from 2000 referring domains, including businessinsider.com, coinmarketcap.com, and cnet.com. Their traffic originates from India, Turkey, the United States, and other countries.

Mercatox is presented as a digital finance platform offering various cryptocurrency-related services on its homepage.

The website advertises various capabilities, including:

• a digital and crypto-currencies exchange with unique currency pairs
• a multi-currency e-wallet for convenient and instant transfers
• margin trading with professional tools
• lending to traders as a form of safe investment
• a payment service with a variety of methods for easy integration
• a franchise partnership option, and peer-to-peer currency exchange for secure virtual currency deals

Mercatox emphasizes its benefits, including low rates, loyalty, and affiliate programs. The website displays a user count, total trading volume in BTC, and the total amount of deals, presumably to establish credibility and size. It has various links, including terms of use, privacy policy, anti-money laundering, and know-your-customer (AML/KYC) policies.

Red Flags

1. Cookie Usage Confirmation: The website uses cookies but doesn’t clearly explain what data is being collected or how it is being used beyond “giving you the best experience.”
2. Lending to Traders: Mercatox advertises “profitable and safe investment solutions” through lending to traders. The specific risks associated with this activity are not outlined on the homepage.
3. Margin Trading Advertised to All Users: The platform advertises “professional tools for traders, high income” through margin trading. Margin trading involves borrowing funds to trade and can be highly risky. It is generally considered to be suitable only for experienced traders. The absence of a clear warning about the risks is a red flag.
4. Claims of Security and Speed: The website mentions “safety,” “speed,” and “innovations” but does not provide specific information on how these are achieved or maintained or third-party validations of these claims.
5. No Mention of Regulatory Compliance or Licenses: The homepage does not indicate whether Mercatox is licensed or regulated by any financial authorities, which is critical for financial platforms.
6. Large Numbers of Users and Transactions Advertised: The website advertises many total users and transactions. There is no verification of these numbers or clarity on how they were calculated.

About Mercatox

According to its About page, Mercatox is a cryptocurrency exchange platform that began operations in 2016. It aims to be a comprehensive trading platform for all levels of traders, from beginners to professionals.

Per the information from November 2019, the platform claims to have over 600,000 users and is listed as one of the top 100 exchanges on Coinmarketcap.

Mercatox offers several cryptocurrency pairs for trading, with more than 700 trading pairs listed, and also provides deposit and withdrawal services.

The platform has plans for various features, including a Lending Program, Market and Stop Orders, Margin Trading, a Decentralized Exchange (DEX), and API support.

Additionally, Mercatox introduces “MERCA,” which is described as a share of Mercatox’s income, supported by a legal agreement, and is not a cryptocurrency.

MERCA owners are, in fact, co-owners of the platform and will receive dividends as per their stake.

Red Flags

1. MERCA Token/Share System: The description of “MERCA” is somewhat vague and may confuse potential investors. It is presented as a share of Mercatox’s income but is not a cryptocurrency. It’s unclear how this is regulated, and the details of the legal agreement supporting MERCA are not provided.
2. Restriction for American Citizens: The note about American citizens being unable to participate in the project (MERCA) and being ineligible to receive the Merca token indicates potential regulatory issues or a lack of compliance with U.S. regulations.
3. Dividend Payouts Uncertainty: The information mentions that MERCA holders will receive dividends per their platform percent stake after the platform overcomes the break-even point. However, no further details or timelines are provided.

Contact Information

The official support center’s link and email address are provided for user questions, technical issues, missing deposits, lost access, etc. A separate business contact email address is listed for official requests, business suggestions, listings, swaps, airdrops, and promos.

The website also lists official news channels for Mercatox, including Twitter, Facebook, Instagram, and Telegram. Still, it specifies that these social media channels are for news only and not for direct communication with the company.

The website also advises users to be cautious of suspicious messages from contacts different from those provided. It encourages double-checking with Mercatox’s official email to confirm the legitimacy of any requests.

Red Flags and Additional Information Needed

1. Lack of Company/Regulatory Information: The website does not provide specific company information, such as a physical address, company registration number, or details about regulatory compliance or licenses that the platform may have. This lack of transparency can concern a financial platform, particularly in the crypto space.
2. Warning About Scammers: The site includes a warning about receiving suspicious messages from contacts that differ from the ones listed on the site and offers an email to double-check the legitimacy of messages. This is a common practice for businesses, but it could indicate that the platform has been targeted for phishing or other scams.
3. Limited Use of Social Media Channels: While the company lists several social media channels, it mentions that they are only for news and do not use these platforms for communication. This might limit the avenues customers can seek help or support, and it’s unclear how responsive the company is through the provided channels.
4. Confirmation of Requests via Email: The website encourages users to double-check the legitimacy of any requests by sending an email to info@mercatox.com. However, it does not guide on the expected response time, and there is a potential security risk in confirming sensitive information through email.

Contact Details Provided

• Support Center: https://support.mercatox.com/
• Support Email: support@mercatox.com
• Business Contacts Email: info@mercatox.com
• Official News Channels:
  • https://twitter.com/Mercatox_info
  • https://www.facebook.com/mercatoxcom/
  • https://t.me/mercatox_official
  • https://www.instagram.com/mercatox_official/

The Mercatox Facebook page was created in 2016. The people who manage it are located in Slovakia and Ukraine.

Information from LinkedIn

According to their LinkedIn page, Mercatox Ltd is registered as a financial services company based in England, at a location specified as WTC 1CV New London House 6 London Street, England, EC3R 7LP, United Kingdom.

The company has a significant workforce, falling in the range of 51 to 200 employees, but interestingly, only six of these individuals are listed on LinkedIn.

This discrepancy raises questions regarding the true size of the company’s operations and the degree of transparency they are willing to provide. Notably, substantial information concerning the company’s services or mission statement is absent. Without a clear understanding of what Mercatox offers or stands for, potential users and investors are left in the dark, leading to skepticism around its operations.

Furthermore, while the LinkedIn page mentions various global locations where employees live—from Ukraine and the Philippines to Nigeria and Malaysia—there is an unclear correlation between these locations and the company’s operations. What role do these employees play, and why are they spread across disparate locations? Is Mercatox a genuinely global operation, or is this scattering of employees more akin to a smokescreen?

Finally, the relatively low number of followers on LinkedIn (94 followers) contrasts sharply with the company’s claim of a substantial employee count. This adds to the skepticism as one would expect a company of Mercatox’s stated size to have a larger and more active presence on professional networks, especially given that they operate in the finance sector.

FAQ

According to their FAQ, Mercatox.com is a digital currency exchange platform designed to be a modern service for accessing cryptocurrency markets.

The platform is intended to be convenient and advantageous for experienced traders and beginners.

Users can create accounts, add funds, and buy or sell cryptocurrencies using different currency pairs.

The platform states that it operates worldwide with only a few restrictions, such as users must be over 18 and have a valid working email address.

Trading options include Limit, Market, and Stop orders.

Mercatox operates with a 0.25% trade fee and is a crypto-to-crypto exchange, indicating that they do not work with fiat currencies (e.g., USD, EURO, YEN, RUB).

The platform also emphasizes security, urging users to set strong passwords and enable Two Factor Authentication (2FA) for increased account protection.

Red Flags

1. Minimum Deposit Amount Warning: The site mentions that certain currencies have minimum deposit amounts and warns that deposits below this minimum could result in lost funds. This is concerning and may not be standard practice for all exchanges.
2. Closure of Account through Support Ticket: The fact that users can’t delete their own account and need to raise a support ticket to close/deactivate their account may concern some users regarding data privacy and user control.
3. No Mention of Insurance or Asset Protection: The website does not provide information about what happens if the assets are lost or stolen. This is a red flag for potential users, considering the risks associated with cryptocurrency exchanges.

Fees and Limits

There is a trade fee of 0.25%.

Instant withdrawal limits are set to 0.5 BTC equivalent per 24 hours for unverified users and 5 BTC equivalent per 24 hours for verified users.

Each cryptocurrency (e.g., Bitcoin, Ethereum, Dogecoin, etc.) has a specific withdrawal fee, minimum deposit amount, and minimum withdrawal amount.

Red Flags

1. High Withdrawal Fees for Certain Tokens: The withdrawal fees for some of the listed tokens (e.g., LUXURIUM, Herbalist Token, Inbox Token, etc.) are exceptionally high, which could deter users from withdrawing these specific assets.
2. High Minimum Deposit and Withdrawal Limits for Certain Tokens: Similar to withdrawal fees, the minimum deposit and withdrawal limits for some tokens are significantly high (e.g., Lite Gold, BitcoinBrand, I Net Token, etc.), which may limit the platform’s usability for small traders or investors.
3. Unknown Cryptocurrencies: The platform supports several cryptocurrencies that might not be widely recognized or have a limited market capitalization (e.g., ARIONUM, LUXURIUM, Herbalist Token, etc.). This could be risky for users who are not familiar with these tokens.
4. Inclusion of Tokens with Similar Names to Well-known Cryptocurrencies: The list includes tokens with names similar to well-known cryptocurrencies (e.g., Bitcoin Bull, BitcoinBrand), which might confuse users or potentially be associated with “copycat” or scam tokens.

Loyalty Program

Participants in the Mercatox loyalty program can earn points by promoting the platform through various channels, such as social media reposting, creating forum topics, and managing translations on Bitcointalk, among other promotional activities.

These points can later be exchanged for privileges, such as discounted trading fees, double affiliate program benefits, daily payment of annual interest for assets held in Mercatox wallets, and voting privileges for adding new coins to the platform.

The platform is open to individual promotional ideas, and the program is in beta.

Red Flags

1. Undefined Loyalty Points System: The details about how points are earned and what the points are worth are not clearly defined. This leaves room for potential arbitrary adjustments by the platform.
2. Daily Payment of Annual Interest for Assets: Offering daily payment of annual interest on assets held in Mercatox wallets could indicate a high-risk investment model, similar to a Ponzi scheme, where returns are paid to earlier investors using the capital of newer investors.
3. Promotion of Platform for Privileges: The program encourages users to promote Mercatox aggressively in exchange for points, which may lead to spammy or overly aggressive marketing tactics that could tarnish the platform’s reputation or annoy potential customers.
4. Beta Phase Without Clear Outline: The announcement states that the loyalty program is in its beta phase. However, there is no information about what this entails or how users’ points and privileges might be affected once the official version is launched.
5. Openness to ‘Any Kind of Opportunities’ for Promotion: Without clear guidelines, the broad invitation for all promotional opportunities might lead to unethical or misleading promotions conducted by participants seeking to earn points.

Affiliate Program

Mercatox offers an affiliate program to allow users to earn additional income.

Users can invite friends through a referral link, and in return, they will receive a percentage of the profits from each exchange transaction made by these referrals.

The commission is structured in two levels:

1. a 15% commission from transactions made by direct referrals (first level)
2. a 5% commission from transactions made by the referrals of these direct referrals (second level)

The profit is calculated instantly, and the amount users receive in their wallet depends on the specifics of the currency purchase/sale and the currency pair involved in the referral’s transaction.

Red Flags

1. High Commission Rates: The commission rates, notably the 15% from direct referrals, are pretty high. This could encourage spammy or aggressive recruitment tactics, as users may be heavily incentivized to bring in new users.
2. Multi-Level Structure: The affiliate program’s structure is multi-level, resembling a multi-level marketing (MLM) scheme. In MLM structures, there is a risk of focusing more on recruitment than on the actual product or service, which can lead to unsustainable operations and possibly resemble a pyramid scheme.

Mercatox Reviews

We find various positive reviews online. However, below the reviews, we often find negative reviews and even scam accusations by users.

For example, one person comments below a review at nogofallmaga.org:

I have funds in Mercatox, supposedly in Canada (Toronto?). However, when I tried contacting them, their Customer Service did not answer my queries.

Below a foxyrating.com review:

Poor support; they’re not answering. Also, there appears to be fake volume. Just check the LTC/BTC pair, and you will see that no one placed those buy and sell orders, yet trades are still occurring at those prices. It seems their staff is buying from themselves to inflate daily volume.

Additionally, we haven’t been able to withdraw Litecoin for more than two weeks, but someone in the chat told me that I should buy Litecoin because it is very cheap.

Furthermore, there are too many scammers in their chat.

This appears to be a scam exchange.

Another person commented:

Good exchange, but be aware of scammers in the chat room.

And at revieweek.com:

Scammers; they deducted 70%, supposedly for commission. Deceptive!

and:

100% crooks; they stole all the money.

Finally, on cryptogeek.info, even though they write, “On Reddit, there are posts containing serious accusations of Mercatox,” their conclusion is, “We conclude that the exchange is legit.” But, here again, we find user comments, such as:

Decent website, but there are many negative reviews about them on the web, and I don’t know why. In many reviews, people write that Mercatox is a scam.

To which one person replies:

It’s because Mercatox is a scam, plain and simple.

Reddit Reviews

On Reddit, we find several posts. For example, in one review of the Mercatox exchange, the experience shared is quite concerning. The user, who has been a member of Mercatox since 2016, alleges that they were initially unable to withdraw 76,000 Dogecoins from the platform.

They describe taking extreme measures to resolve this issue, including reporting Mercatox on various social media platforms, such as Reddit, GitHub, Twitter, Facebook, and Google, and filing a report with the police station and CoinMarketCap.

Only after this extensive reporting did the user claim their issue was resolved. They were contacted by a Mercatox representative named Hanna, who scheduled a specific time to facilitate the withdrawal of the funds. During this ordeal, the user noted receiving what they perceived to be dishonest messages from Mercatox support, with no responses from any higher authorities within the organization.

The user was left with the impression that only after significant personal effort and widespread reporting did Mercatox respond and resolve the issue. Given this experience, the user advises others to refrain from depositing into Mercatox until these issues are adequately addressed.

This account paints a picture of a potentially unreliable and unresponsive platform, suggesting that one might only secure their funds after significant public or legal action. While the user’s issue was eventually resolved, the process appeared to be far from straightforward and required substantial effort on their part.

Trustpilot

On Trustpilot, Mercatox receives substantial criticism from its users. With a TrustScore of 2 out of 5 and 72% of reviewers giving it a 1-star rating, the platform does not appear to be in good standing among its users.

Customers have reported coins being held under “maintenance” for extended periods, sometimes over two years. This has caused frustration and skepticism about the platform’s solvency and coin holdings.

Users have reported poor customer service from Mercatox, with unresponsive and evasive support and unhelpful responses to queries. Some have even had their funds stuck during withdrawals and received no satisfactory resolution from the company, leaving them feeling like their money was stolen.

Moreover, some users assert that Mercatox engages in deceptive practices, with accusations ranging from fake trading volumes to arbitrary and unexpected disabling of deposits and withdrawals without prior notice. The fees on the platform are described as excessive, and some users believe that the trading environment on Mercatox is manipulated, preventing them from making revenue from their trades.

There are also claims of poor quality assurance, with one review mentioning an alarming incident where glass was found in food associated with the company, which did not prompt an appropriate response.

The overarching sentiment in these reviews is one of deep skepticism toward Mercatox. Users express a lack of faith in the platform’s reliability, legitimacy, and transparency, as well as dissatisfaction with the platform’s customer service and operating practices.

Mercatox Responds to the Scam Accusations

Mercatox published several pages warning about Mercatox scams.

They write that recently, there have been incidences of hoax emails fraudulently using the Mercatox name, prompting the company to issue warnings to its customers and users. These scam emails mimic the Mercatox logo and copyright, and they have been notifying coin developers, users, and customers about various fictitious issues, such as voting cancellations due to fake votes, delisting of tokens, or special offers for listing or promotional actions on the Mercatox platform.

Additionally, the company stresses that they never communicate business-related requests through social media and that the only legitimate Mercatox domains and emails are particular (e.g., “info@mercatox.com” and “support@mercatox.com”).

They even list some of the fake domains that have been pretending to be Mercatox:

• mercatox.at – It has a SEMrush Authority Score of 3% with 4 backlinks from 3 referring domains, including mercatox.com.
• mercatox.exchange was registered through GoDaddy on March 10, 2022. While it does not seem online, it received 775 visits in July 2023, according to SimilarWeb. It has a SEMrush Authority Score of 3% with 4 backlinks from 3 referring domains, including mercatox.com.
• mercatox.exchange.com

So is the Mercatox scam a Mercatox Impostor scam, or is Mercatox.com itself a scam?

An Answer from Regulators

In June 2022, the California Department of Financial Protection and Innovation (DFPI) received a complaint from a California resident regarding a potential cryptocurrency fraud scheme involving various cryptocurrency apps, including Mercatox.

The complainant reported being defrauded over $500,000 by someone who identified themselves online under “Zhang Tian Yi (Herman).” This person instructed the complainant to download multiple cryptocurrency apps, including NVEX, Konim, and Mercatox, to invest her money, initially under the guise of investing in “binary options.”

The sequence of events involved the alleged fraudster constantly switching the complainant’s investments between these apps, each time coming up with a new reason for the move. Eventually, the victim realized her funds were no longer in her name but had been moved to Herman’s account.

She could not recover her money despite paying multiple exorbitant fees to supposedly unfreeze her account and handle her funds, including income tax on the purported earnings. Ultimately, the alleged fraudster cut off communication and was revealed to be using someone else’s Instagram photos as their identity.

The DFPI has identified this type of scheme as resembling a standard “Advance Fee Scheme,” wherein victims are convinced to pay money upfront to receive a more significant sum in return, which never materializes.

The DFPI strongly urges consumers to exercise extreme caution before responding to any solicitation offering investment or financial services. The department provides channels for checking the licensing status of financial service providers in California. It encourages consumers to report suspected violations of state law or improprieties regarding consumer financial products or services.

Conclusion

Mercatox has received both positive and negative feedback. While some users appreciate its trading platform, others have reported issues with customer service, withdrawals, and fraud allegations.

Critically, the official response from Mercatox acknowledges the existence of impostor scams using its name, suggesting at least part of the negativity surrounding the platform might be attributed to external fraudsters exploiting Mercatox’s identity. This is a crucial distinction, as it raises the question of whether the platform itself is fraudulent or a victim of scammers using its name to defraud people.

However, the persistent theme of poor customer service, high fees, and ‘maintenance’ lock-ups described by many users is concerning. These issues appear widespread and consistent over time, casting a shadow over Mercatox’s operations irrespective of impostor scams. Moreover, the alarming situation involving a complaint to the California Department of Financial Protection and Innovation adds a layer of regulatory concern.

Given this evidence, defining Mercatox as a scam or a legitimate platform is challenging. What is clear, though, is that using Mercatox carries a high level of risk. Until more transparent, responsive, and consistent operations are demonstrated by Mercatox and until regulatory authorities provide more explicit guidance, potential users should approach this platform with extreme caution.

In light of the current information, it would be prudent for individuals to consider alternative platforms that have established a more reliable and transparent reputation. Always ensure to perform diligent research and verify the credentials of any financial service provider, as suggested by regulatory bodies such as the DFPI, before engaging in any investment activity.

If you are a victim of online scams, please let us know by commenting below, and if you have lost a significant amount of money, do not lose hope. We can help you recover your funds!