Is Forex Trading Banned in the US?

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Last Updated July 23rd 2021
5 Min Read

If you have been spending time researching and reading forex-related articles and information on the internet, you would have come across a lot of confusing materials on the topic. There is a lot of misinformation and confusion going around, especially on whether forex trading is legal in the US.

Although you might read through a lot of articles, you might end up more confused than ever after reading them. It is such a confusing topic that many people still ask questions like ‘is forex legal’, ‘is forex trading in the US legal’ on popular websites like Quora.

The fact that there aren’t many articles addressing these questions has only made life difficult for those who wish to seek information. This article aims to put that question to rest without leaving any doubt. So, if you are one of the thousands who wish to know about the legality of forex trading or whether it is banned in the US, read on. Your doubt is about to be cleared forever.


Is Forex Legal?

It is not a simple question that can be answered by yes or no. Forex is the largest and most liquid market in the world with a daily volume of $5.1 trillion and more. The answer to the question of whether forex is legal depends on which country you are in. For now, let us say that forex is legal in countries that allow Forex trading, which is, thankfully many countries around the world.

Is Forex Trading Banned in the US?

That brings us to the next question. Is it banned in the US?

No, forex trading is not banned in the US. It is legal and hence you are permitted to trade in forex in the US. In this context, you must remember that forex trading is a global event. It is a market where banks, market makers, brokers, and other entities work together to make it possible for individuals to trade in global currencies. It is largely thanks to the digital age and the internet, along with universal online access that people from around the world can participate in forex trading.

Coming back to the question of whether forex trading is banned in the US, you already know it isn’t. But of course, the United States has some of the toughest laws and guidelines for finance-related markets, in contrast to some other countries in the world.

Forex market is an over-the-counter market with no centralized regulatory monitoring on its working. However, in the US, there are some financial regulators such as SEC, SIPC, NFA, CTFC, and FINCA to protect the forex traders.

Despite these national regulations and regulators, the forex is unregulated. The only constraint, if it can be termed so, is that the forex brokers must follow strict guidelines and obtain the appropriate licenses to operate. This is a good step for forex traders as it helps to prevent scams.

The Legal Status of Forex Trading Around the World

Although there are certain restrictions placed on brokers, forex is 100% legal in the United States. It is a fact that most countries allow forex trading. However, certain countries do not allow forex trading – Belgium, for instance. The countries that do not allow people to trade in forex do so because of local laws as well as for control of money.

The legal status of forex trading depends on the country and its government. They are often based on various financial regulations and rules. Here are some of the countries that allow their citizens to trade in forex through a broker:

  • USA
  • Italy
  • Cyprus
  • Canada
  • Japan
  • Australia
  • Malta
  • Indonesia
  • Bulgaria
  • Switzerland
  • Romania
  • Germany
  • United Kingdom

Apart from these, most of the countries located in Eastern and Central Europe also allow forex trading. They have limited restrictions in place so that people can get into forex trading with online forex brokers.

However, some countries do not allow their citizens to freely trade in forex. While they allow them to trade in forex, they’ve also imposed certain restrictions on the people so that they can trade only under specific conditions. Some of the countries that allow their citizens to trade in forex but in a restricted manner are:

  • Nigeria
  • South Africa
  • China
  • Ukraine
  • Egypt
  • Russia
  • India

It is to be noted that these countries don’t ban forex trading. Instead, the government places several restrictions, making it difficult for people to gain access to the markets. Some of these restrictions may be because of anti-money laundering laws.

The restrictions may be a limit to the amount of money you can invest, or how the forex account can be accessed, and trading transactions are done. Some other restrictions could be in place based on money and trading as well. If you live in one of these countries with restrictions on forex, you could still trade forex following the rules and regulations set.

There are some countries where forex is not permitted at all. They are:

  • North Korea
  • France
  • Malaysia
  • Belgium
  • Bosnia Herzegovina
  • Israel
  • Pakistan

Few other countries with strict Sharia laws also ban forex trading.


Forex Trading in the US

It must be clear to you by now that forex trading is not banned in the US and that it is perfectly legal to trade forex. Furthermore, you can trade forex in the US even if you are not a US citizen. Any nationality can trade Forex within the US and US residents can invest and trade in the forex market.

If you wish to trade in the forex market in the US, it is better to find a US forex broker. This can be advantageous to you because every forex broker operating within the US must be registered with the CFTC and the NFA. Without registration, the broker will not be able to operate or offer clients their services without the approval of these regulated financial governing bodies.

So, if you are looking to enter forex trading in the US, look for a US trader approved by the regulating bodies NFA and CTFC. It is the safest and easiest route to enter the market.

Top Forex Brokers in the USA

Here is a list of some of the top forex brokers in the US if you are looking to enter the forex market: USA – FCA regulated platform with the quickest and easiest functions  

IG – an English platform trusted and respected globally that offers an enviable mix of educational and investment services

TD Ameritrade – an online trading platform that has everything readily available for you, if you are a US resident


Forex trading is legal in the US. But since it is governed by US law and tax requirements, you need to look at them in detail before you start trading. It is especially important to understand the various laws on taxation because any failure in compliance could render your trading illegal. So, the bottom line is that if you are trading forex under the laws and tax regulations laid out by the US authorities, it is very much legal.


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