The withdrawal denial due to VPN usage scam is a tactic employed by some brokers to deny or delay a trader’s withdrawal request based on the fact that they are using a VPN (Virtual Private Network) to access their account. Brokers who engage in this scam claim that VPN usage is a violation of their terms and conditions, even though there is often no legitimate reason to block withdrawals based on VPN access. The scam is typically used as a tool to avoid paying out profits, especially when the trader has used a VPN for privacy reasons or to access the platform from a region where it is blocked.

This isn’t about security—it’s about blocking access to your funds.

How the Scam Works

1. Trader Uses a VPN for Privacy or Access
A trader may use a VPN to:

• Ensure privacy and security, especially when trading from public or unsecured networks
• Bypass regional restrictions if the broker is not accessible in their country
• Protect personal data while accessing their trading account, a common practice for security-conscious traders

VPNs are widely used and completely legitimate tools for ensuring security and privacy online.

2. Trader Requests a Withdrawal
After a period of trading, the trader decides to withdraw profits from their account. They initiate a withdrawal request, expecting the process to proceed smoothly.

3. Broker Denies the Withdrawal Claiming VPN Usage Violates Terms
When the trader attempts to withdraw their funds, the broker informs them that:

“Your withdrawal request cannot be processed due to VPN usage.”
“We have detected VPN usage, which is against our terms and conditions.”
“As per our security policies, we do not process withdrawals from accounts accessed via a VPN.”

The broker then blocks the withdrawal request, often citing security concerns or claiming that the VPN usage invalidates the trader’s identity verification.

4. Broker Refuses to Provide Evidence of VPN Policy Violation
When the trader questions the decision or asks for clarification, they may receive vague or evasive responses such as:

“Our system has flagged your account for VPN access.”
“We cannot process withdrawals from accounts with suspected VPN use.”
“Please provide proof of identity from your regular IP address.”

In many cases, the broker fails to provide concrete evidence of any breach of terms, and the trader is left with no clear way to resolve the issue.

5. Broker Delays or Blocks Withdrawal Indefinitely
After blocking the withdrawal, the broker often:

• Delays the withdrawal process, claiming that it is under “review”
• Requests excessive documentation or additional KYC (Know Your Customer) verification
• Eventually blocks the withdrawal entirely, citing “security” concerns due to VPN usage as a reason for the denial

As a result, the trader’s profits are locked in the account with no recourse for recovery.

Real Case: Withdrawal Blocked After VPN Use for Security

A trader, using a VPN for privacy, successfully trades on a forex platform for several months and accrues a profit of $4,000. When they attempt to withdraw the funds, they receive a message:

“Your withdrawal has been denied due to the use of VPN. Please disable your VPN and resubmit the request.”

The trader, not realizing VPN usage was even an issue, follows the broker’s instructions but is then told:

“The account is under review due to security concerns.”
“We cannot proceed with withdrawals until your identity is verified using a non-VPN IP address.”

The trader has no way to access their funds, and after several weeks, the broker stops responding altogether.

Why This Scam Is So Dangerous

The withdrawal denial due to VPN usage scam is harmful for several reasons:

• It unfairly restricts access to funds for no legitimate reason, forcing traders to either comply with the broker’s demands or accept that their funds may be withheld indefinitely
• It targets security-conscious traders who use VPNs to protect their privacy, creating an unnecessary barrier to withdrawing profits
• It exploits the lack of transparency in the broker’s terms, as they may not have adequately disclosed that VPN usage would affect withdrawals
• It creates confusion, as many traders are unaware that some brokers may have hidden policies or technical restrictions related to VPN use
• It delays the withdrawal process, allowing brokers to retain control over trader funds longer than necessary, often to the broker’s benefit

Ultimately, the broker benefits by locking trader funds and delaying profits, often under the guise of security policies.

How to Detect the Scam

1. Broker Claims VPN Usage as a Breach Without Clear Terms
Check the broker’s terms and conditions thoroughly for any mention of VPN restrictions. If the broker has no clear policy regarding VPN usage or fails to disclose this limitation in the terms, this is a sign of potential manipulation.

2. Withdrawal Denied After Using a VPN for Privacy
If you’ve used a VPN consistently throughout your trading and then suddenly find your withdrawal denied based on VPN use, this is a red flag. Legitimate brokers should allow VPN usage unless it directly violates specific regulations in your jurisdiction, and they should not block withdrawals arbitrarily.

3. Unresponsive or Vague Broker Support
When you contact support for an explanation, if the broker provides:

• Vague responses about security policies
• No clear documentation of the specific policy on VPN usage
• Delay tactics such as demanding extra verification for no apparent reason

…this is likely a scam to withhold funds.

4. Lack of Clear Communication Regarding VPN Usage
A trustworthy broker will inform users if VPN usage is against their policy before they engage in trading, not after they’ve made profits or requested a withdrawal.

How to Protect Yourself

1. Choose Brokers with Clear, Transparent Terms
When selecting a broker, ensure that their terms and conditions are clear regarding:

• Withdrawal policies, especially in relation to VPN usage
• Security and identity verification procedures

If a broker hides or does not clarify their position on VPN usage, consider it a warning sign.

2. Avoid Brokers Who Withhold Withdrawals Due to VPN Usage
If you’re using a VPN for security reasons, select brokers who have no restrictions on VPN use and ensure transparency around their withdrawal and KYC policies. Look for brokers with strong regulatory oversight and reliable customer service.

3. Always Withdraw Funds Regularly
Avoid leaving large sums of money in your trading account for extended periods. Make sure to withdraw your profits regularly, particularly after successful trades, to avoid issues down the line.

4. Contact Customer Support Immediately for Clarification
If your withdrawal is denied, ask for:

• Specific references to the terms and conditions related to VPN use
• Clear steps to resolve the issue, including whether there’s any specific verification needed
• Proof of why VPN usage is preventing the withdrawal

Document all conversations and responses in case the issue escalates.

5. Use Brokers That Are Regulated and Transparent
Ensure that the broker you are using is regulated by a respected authority such as FCA, ASIC, or CySEC. Regulated brokers are typically more accountable and transparent about their policies, including those related to security measures like VPN usage.

Regulatory Expectations

Under MiFID II, FCA, ASIC, and CySEC regulations, brokers must:

• Clearly disclose any restrictions related to VPN usage in their terms and conditions
• Ensure that withdrawal procedures are not unduly delayed and that funds are returned promptly to traders
• Provide transparent and reasonable explanations for any withdrawal restrictions, including those related to VPN usage
• Allow traders to access their funds freely, unless there is a genuine legal or regulatory reason to restrict access

Failure to adhere to these rules can result in regulatory penalties, including fines or loss of license for the broker.

Conclusion: If They Block Withdrawals Due to VPN Usage, It’s a Major Red Flag

The withdrawal denial due to VPN usage scam is a manipulative tactic used by dishonest brokers to prevent traders from accessing their funds after they have successfully profited. By claiming that VPN use violates security protocols, the broker locks profits and restricts trading actions.

To protect yourself, always choose regulated brokers, understand their withdrawal policies up front, and regularly withdraw funds to avoid issues. If a broker denies your withdrawal based on VPN use, demand clear explanations and escalate the issue to a regulatory body if necessary.

To learn more about how to avoid broker manipulation and ensure safe trading, enrol in our Trading Courses. We’ll teach you how to trade with confidence and avoid common scams.