Asian Forex broker InstaForex has ceased cooperation with Liberty Reserve, the payment system they have used up until now, following the company's closure at the end of last month. According to InstaForex, all funds deposited at Liberty Reserve have disappeared and according to Clause 7.7.1 of the Public Offer Agreement, all money that has vanished in this manner is deducted from the trading account of a customer and is stored in the company's accounts.
Nevertheless, in what they believe to be a gesture to meet the client's needs and concerns, the management at InstaForex has decided to restrict client's funds for 6 months starting from May 30, 2013. Upon conclusion of the 6 month term, InstaForex will deduct from each account funded by Liberty Reserve only 50% of all the funds deposited through the payment module, not 100%.
In essence, InstaForex, one of the most popular Forex brokers in Asia, is penalizing its own clients for using a payment system which they themselves recommended and used for years. Certainly, the company could have taken a more lenient approach to the situation and not placed the blame on the investors who innocently followed the thousands of other traders who used a bona fide company to place their trades. Liberty Reserve has been used not only by InstaForex but by many other online brokers. Until now, however, no other brokerage has come out with these actions.