Is Forex Legal? Is Forex Trading Legal in US?
As you are probably aware if you spend any time researching and reading forex-related topics on the internet, there is always a lot of misinformation and confusion.
Somehow, the questions of ‘Is Forex Legal’ and ‘Is Forex Trading Legal in the US’ get asked so often on websites like Quora that it surprises me – I actually wasn’t able to find many articles answering this specific question, so I’ve decided to write a full article about it.
The question ‘Is Forex Legal’ is very broad, so it requires a lot of information in order to answer it fully. Since forex is so huge and is a globally traded market with a daily volume of over $5.1 trillion, this is not a simple question to answer!
Forex trading can be legal or illegal depending on what country you are in.
Forex trading is essentially a global phenomenon. Thanks to the digital age and the introduction of the internet and universal online access, more and more people from around the world are getting exposed to areas (such as forex trading) that they might not otherwise get a chance to get involved in.
The market is traded by normal people thanks to a large network of banks, market makers, liquidity providers, brokers and other entities who make it possible for others to dip their hands in the global currency markets to try and make profits off of the changes in prices.
Is Forex Trading Legal in US?
Yes, forex trading is legal in the US. Also, the United States has some of the tightest laws and guidelines when it comes to finance-related markets, especially compared to other places in the world.
Some of the financial regulators in the USA who have a hand in protecting forex traders include:
- SEC – securities;
- SIPC – investor protection
- NFA – non-governmental futures association
- CTFC – currency market regulation
- FINCA – financial markets, independent regulator
Despite the regulators and regulations, forex remains quite unregulated, which is how so many forex scams and frauds are able to run freely and, occasionally, thrive.
Forex brokers need to follow strict guidelines and obtain the appropriate licenses in order to operate, which is good for us forex traders to prevent scams.
But yes, forex is 100% legal is the United States, as it is in many other areas in the world.
So, where is forex legal?
Most countries allow forex trading. Unfortunately, for reasons, I will explain in this article, some countries do not allow their people to openly trade the forex markets.
Forex example, the USA allows forex trading, however, countries such as Belgium do not.
Why is this? It can be for a number of reasons, usually pertaining to local laws and the government control of money.
Let’s break it down and explore which countries do and do not allow forex trading.
Where is Forex Trading Legal? Where is Forex Trading Illegal?
Where forex trading is legal and illegal depends on the country and it’s government, rules and financial regulations.
Which countries allow forex trading?
The following countries allow citizens to openly trade the forex markets through a broker:
- United Kingdom
- Most of the countries located in Eastern and Central Europe
This is a basic outline of the countries that fully allow forex trading and have limited restrictions in place, making it easy for citizens of these countries to get involved in forex trading with online forex brokers.
Let’s look at countries that do not grant this same forex privilege to its citizens.
Which countries don’t allow forex trading?
There are certain countries that have intense restrictions on open forex trading, and there are some that have simply banned it outright.
Let’s look into both of these groups.
Countries With Restricted Forex Trading
These are countries where forex trading is actually allowed, however, the government places restrictions that make it difficult for some to gain access to the markets.
These restrictions can also stem from anti-money laundering laws.
The restrictions vary from how much money you can invest in a broker account, how forex can be accessed and traded, and other limitations based on money and trading.
The countries who place restrictions on forex trading include:
- South Africa
These countries, although placing limits on forex trading, still allow it’s citizens to trade and there are many successful traders that live in these parts of the world – there is no reason to not try forex if you live in one of these restricted countries.
However, you are not so lucky if you happen to be in one of the countries that outright ban forex trading.
Let’s take a look at the countries where forex is not permitted.
Countries With Banned Forex Trading
The countries who do not allow forex trading are:
- North Korea
- Bosnia Herzegovina
- Pakistan (and other countries with strict Sharia laws)
The reasons the government’s in these countries decided to ban forex trading vary.
How is Forex Legal? How Legal is Forex Trading?
Forex is legal because it involves trading currencies from around the world, which many average people happen to do when they travel. Forex trading is simply done on a bigger scale, allowing everyday people to try and gamble on the global economy and the currency rates of different countries.
So, how is forex legal?
A better question would be why wouldn’t forex be legal? There is no justifiable reason that the average person cannot dip their hand into open financial markets, the same way we can with stock markets.
Forex trading is open for most people, as it should be.
The beauty of forex trading is that almost everyone can get involved, which means anyone can have a shot at becoming financially free, all from trading the forex markets.
If forex trading wasn’t legal, I would be out of a job! (As would millions of others).
Learn to Trade Forex
Happen to live in one of the countries where forex trading is legal and accepted? Congrats! This is a great reason to consider forex as a possible way to make some money or, if you’re dedicated enough, make a successful living.
My friends and I have been full-time forex traders for years now, and it has changed my life – I have been lucky enough to become financially free and currently make high six-figure salaries, year after year, solely from forex trading.
This is why I recommend forex trading to anyone and everyone who is willing to put the time in to learn how it works.
You simply cannot just dump money into a forex broker and start trading, or you will lose your entire bankroll.
I’ve seen it happen, it is not pretty.
If you are a beginner to forex and are looking to learn how to trade and make big profits day after day, you need to put in the time to study and learn proper strategy.
If you are interested in learning step-by-step, from beginner to professional trader in a month or less, go ahead and check out our post on the best forex course that will teach you everything you need to know and more.
Also, if you haven’t already, make sure to grab our Forex Trading Fortunes PDF – it is seriously one of the best guides out there on how to trade forex. Look to the sidebar to the left of this post to get your copy sent straight to your email, today, for free.