The news that Apple has removed MetaTrader4 and MetaTrader5 from its app store has shocked many. MetaTrader4 has been a staple in the trading platform world since 2005. The company has its products embedded in many forex brokers’ trading platforms, as it is one of the most prominent White Labeling software companies in the trading universe. There might be several concerns facing brokers and traders who use platforms that rely on MetaTrader4 as their base product. A question circling this issue is why MetaQuotes products were removed from the App Store to begin with. The impact on brokers and traders could be a turning point for users of forex trading platforms.
Why Was MetaTrader4 Removed from the App Store?
In September, Apple decided to remove MetaTrader4 and MetaTrader5 from the App Store. Both of these products are software products that are used extensively by trading platforms and retail investors globally. The reason for the removal of MetaTrader4 (MT4) and MetaTrader5 (MT5) from the platform stem from an issue that surrounds a cryptocurrency scam that was profiled in a Forbes article. According to the report, a California man known as Cy lost over $1 million in cryptocurrency after making all of his digital currency trades on the MetaTrader App. On September 23, 2022, MetaQuotes received a letter from Apple that said that the firm’s trading apps do not comply with the App Store review guidelines.
Apple told MetaQuotes that the change in their policy would not impact customers who have already downloaded MT4 and MT5 from the App store.
In September, MetaQuotes said they were investigating the incident and looking into additional action to protect the App Store. According to Forbes, MetaQuotes and the legal representation of MetaQuotes did not respond to any requests for comments when this occurred in September.
Additionally, Apple did not respond either. The MetaTrader4 and MT5 apps are still listed for purchase on Google Play, and Google did not respond to Forbes for a comment. Forbes reports that existing installs of the popular MT4 and MT5 products still function. Despite the App Store removal, MT4 and MT5 will still continue to work and can be downloaded on Android.
What are MT4 and MT5?
MT4 and MT5 are widely used software trading platforms. MT4 was released in 2005 by MetaQuotes Software and focuses on providing trading access to the retail market. MT5 was released in 2009 and provided similar functionality but allows traders to transact and study stocks, commodities, and CFDs.
The platforms offer technical analysis indicators, expert advisors, and signals that help traders make trading decisions. Both platforms handle account management, trade processing and quote transmission, and API interfaces that allow a broker’s platform to achieve data recovery functions. Both MT4 and MT5 also have a customized mobile app.
MT4 and MT5 support several different operating systems. These trading software applications can be used on Windows, Mac OS, iOS, and Android devices.
Both MT4 and MT5 provide expert advisors. These are algorithms that allow traders to transact automatically. The expert advisors enable you to develop a trading robot that uses a combination of technical analysis indicators to generate automated trading strategies.
MT4 and MT5 account for approximately 80% of the retail trading app market, which could significantly reduce the volumes of brokers and traders who use MT4 and MT5 as the base software for the trading platforms.
MetaTrader4 White Labeling
MT4 and MT5 have customizable functionality that allows brokers to use their systems to create their platforms. These features are called White Labeling. A White Label is a complete infrastructure. Instead of buying a platform already built or building one from scratch, a forex broker can use the White Label capability to customize a trading platform for their retail clients. It’s popular for forex trading and CFD brokers to purchase MT4 or MT5 and customize the software to meet their platform needs.
MT4 and MT5 have stepped up their verification of corporate accounts before even receiving a letter from Apple. The move by MetaQuotes to increase proof has made the requirements of White Labeling more difficult for new brokers interested in the White Label process with MetaQuotes. Not only do prospective brokers need to verify a corporate account, but they also need to register directors and shareholders and show proof of a physical address.
Prospective clients need to provide a certified letter of reference issued by a bank. This type of statement verifies the existence of an active bank account. MetaQuotes also requires the prospective client to have a registered number and address. The process of corporate verification is a challenge to many brokers trying to start in jurisdictions where the registration is less stringent and less costly.
How Could a Scam Have Occurred?
By all accounts, MetaQuotes licenses its software to legitimate forex and CFD brokerage companies. It is considered an agnostic software company that mainstream brokers use. According to the Global Anti-Scam Organization (a scam advocacy group), MetaQuotes also allows licenses to plug-in users known as virtual dealers. Scammers can use these virtual dealers to manipulate market prices and simulate account balances, generating fictional profits and losses. According to Forbes, MetaQuotes did not explain how a bad actor can use their software to generate fake trades and did not have a fix on how to mitigate this activity. In the wake of this activity and the non-response in September to this problem, MT4 and MT5 were removed from the App Store.
How did the Removal Impact MetaQuotes?
MetaQuotes was interviewed by Finance Magnates in the wake of the letter received by Apple. According to a MetaQuotes representative, removing the trading apps from the App Store has caused significant losses to the company. Not only does removing the App impact MetaQuotes, but it also impacts the retail trading industry. According to Finance Magnates, the MT4 and MT5 software hold a market share of nearly 79%.
The Bottom Line
The removal of MetaTrader4 and MetaTrader5 from the App Store is a big hit to the industry and MetaQuotes. Representatives from Metaquotes have told sources that the disposal has been a hit to the company. The reason behind removing the popular trading app from the App Store is that the software, according to Apple, no longer met App Store review guidelines. The details of the issue are more involved.
The impetus for the removal came as a California man known as Cy lost over $1 million in cryptocurrency after making all of his digital currency trade on the MetaTrader App. It appears that a virtual broker could fool Cy and create fictitious balances. While MetaQuotes seems to have relatively strict guidelines in allowing companies to White Label their software, some companies have been able to create a virtual environment that absconded money from Cy. Cy successfully lobbied Apple to pull MT4 and MT5 from the App Store. While you can no longer download these apps to your iOS devices, any previously installed apps will still work. Additionally, MT4 and MT5 can still be downloaded via Google Play and still work on Android devices.
MetaQuotes has a solid reputation, creating MT4 in 2005 and following up with MT5 in 2009. While MT4 mainly focuses on forex trading, MT5 branched out to stocks, commodities, and CFDs. The combination of both software products holds about 79% of the software market share in the trading arena. They also have the bulk of the market share in mobile apps. The question for brokers and traders is whether this issue is permanent or if MetaQuotes will come up with some fix that will allow Apple to restore its ability to download its apps from the App Store. With nearly 80% of the market share, no apparent software producer might be a candidate to take over and steal market share from MetaQuotes.
Even before receiving a letter from Apple, MetaQuotes had stepped up its corporate policy relative to verification. It requires a plethora of documentation, including corporate and active bank registration. The underlying issue appears to be how MetaQuotes provides access to certain virtual entities, which generate potential theft and bad press.