Beware! SFXCapitals is an offshore broker! Your investment may be at risk.
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SFXCapitals is a Forex brokerage registered in New Zealand. It provides the MetaTrader 4 platform and а wide range of trading options, as well as an impressive array of payment methods which include popular e-wallets. We further learn from the website of the brokerage that potential clients are extended a leverage of 1:100.
SFXCapitals regulation & safety of funds
According to the website the company -SFX CAPITALS MANAGEMENT LIMITED- behind the brokerage is supposedly registered in New Zealand and even flaunts on its website a “business certificate.”
The so-called business “certificate” has a spelling mistake on it and by the looks of it SFXCapitals has not put much effort into attempting to look legitimate in the eyes of potential visitors of the website. Furthermore, Forex brokerages operating in New Zealand have to be licensed by the Financial Markets Authority – the New Zealand financial regulator. We find no mention of a license on the brokerage’s website, however, in order to be diligent – we also checked with the online registry of the FMA and a search with the broker’s name did not yield any relevant results. Thus we may safely conclude that the brokerage does not fall under any regulatory oversight whatsoever.
This should immediately raise red flags because the lack of regulation not only means no participation in a financial compensation scheme, but also no authority to which to turn in case of fraud. We further find troubling things about the brokerage, because in the terms and conditions of SFXCapitals we come across a Belize address and a Saint Vincent and the Grenadines address. All this is a clear sign the operation is quite shady.
Last but not least, even though the brokerage purports to provide the MetaTrader 4 platform which is the foremost trading terminal at the moment, there is no demo account available. The lack of a test-drive is problematic because we cannot get acquainted with the trading conditions of the brokerage. We only learn that clients are extended a generous leverage of 1:100 which, however, is not enough as information. We also see that the brokerage claims to provide binary options trading (again without a test-drive). We remind readers that binary options trading is prohibited in Europe as of last summer.
All that was stated above, including the lack of regulation and the unclear corporate information incline us to suspect that potential clients of the brokerage may be open to substantial risk.
We urge traders to exclude such risk in trading by only associating with brokers regulated by prestigious regulatory agencies, such as the FCA and CySec, which require compliance with a number of strict rules that give significant assurance for the security of the clients funds.
The segregation of accounts is among the rules which are especially important in the trading world, because it drastically lowers the risk of possible commingling.
Another is the participation in a compensatory scheme by which the client’s losses will be covered in the unlikely case the broker goes bankrupt or attempts to swindle traders.
SFXCapitals deposit/withdrawal methods and fees
Clients of the brokerage may deposit or withdrawal via a wide range of payment methods, as was pointed out above. The supported payment methods are the standards Visa and MasterCard, e-wallets such as Skrill, Neteller and PerfectMoney, as well cryptocurrencies such as Bitcoin and Ethereum. We do not learn about any nasty withdrawal conditions This is quite common with scammers because they choose not to disclose such “unfavorable” details to traders and only after having received a deposit from a client do they charge some unexpected withdrawal fee or maintenance fee. With SFXCapitals we simply cannot be sure of their intentions. This is why we advise traders to always put up only the required minimum deposit, instead of risking a bigger amount with no certainty. Afterwards, they may also try to withdraw a small amount in order to check for any unexpected fees or delays. Such fees and delays are usually the signs of a scammer.
How does the scam work?
Information is a pretty solid criteria for judging a brokers legitimacy. Scammers would not share much of their information, because precisely there inconsistencies and irregularities may appear which expose the whole set-up. A good example is this very broker and the lack of crucial information about the company behind it.
After informing themselves for the brokers trading conditions – traders should be well-versed in the way of the scam:
Through clicking an ad with promises for fast money, you will be redirected to a website such as Bitcoin Evolution or Crypto Revolt where registration will require you to give your address, email and phone number. After sharing your personal information, you will being receiving calls from brokers, compelling you to invest with them and win big. After a few minutes hearing their pitches, you decide to deposit some $200-250. And just like that – the scammers take a fat commission from this initial deposit.
After they are done with you, senior scammers begin working you into putting even more money. They say it’s the only way to profit from trading even more. After making the mistake of investing even further, you’ll begin wanting to get out of this and withdraw what you have left.
Unfortunately, the con-artists have no such thing in mind. They will now begin persuading you to wait it out and not withdraw right now. The motive here is quite straightforward – traders have a limited time window for filing a chargeback with their bank and get their money back. The “recovery department” will simply want to mislead you into missing this crucial period and, along the way, losing any chance you might have of getting the money back.
What to do when scammed?
As was mentioned above, scamming is quite the common in the trading world and, sadly, even you might suffer from it. In such an unfortunate case there still may be some available options for you.
You may contact your bank or credit card provider and file a chargeback. Furthermore, due to the high instances of fraud – both Visa and MasterCard have decided to sidestep scammers as best they can in forex trading. The first thing we have seen so far is that MasterCard has increased the previous time period of six months for filing a chargeback to a year and a half with their rival Visa expected to follow suit in December.
If, however, you have provided the broker with your credit card details, immediately cancel your credit card.
If you have given information regarding your online banking pass – you should switch it asap!
Beware of potential calls from self-described “recovery agencies”! They prey on scammed and vulnerable traders who are desperate to recover their losses. They will require an “up-front” payment to help you, but after paying them, no such help will be coming your way!