Beware! BitcapCM is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
BitcapCM offers trading in Forex, Commodities, Indices, Stock and Cryptocurrency. They present five type of trading accounts with the main difference between them being the minimum deposit requirement:
There is also a range of Islamic, or swap-free, accounts, as well as the option to open a Demo account with 14 days of free access.
The registration process is easy and straightforward – the form asks for First and Last name, email address, phone number, date of birth, and a choice of currency (USD or EUR). There is also a dropdown for trading platform, but MT4 is the only option, so there is no choice really. After successful registration, the account number and password was displayed in plain sight, which is not in line with privacy and security practices, and we did not receive a confirmation email in our mailbox.
BitcapCM regulation & safety of funds
BitcapCM is registered in the offshore zone Marshall Islands. On the Contact Us page we find a different company name – KLDC Technical Systems, which is not mentioned anywhere in the Terms and Conditions. Researching the latter company, we found an investor warning by the Austrian Financial Market Authority (FMA) from June 20, 2020:
Another thing we discovered is that there is a company with the same name registered in Sofia, Bulgaria – KLDC Technical Systems EOOD. Bulgaria’s regulations allow for a quick and inexpensive company registration process (you can register a firm with as little as 1 EUR capital) and is often used to set up call centres for customer support services due to lower labour costs and relatively high percentage of people speaking English.
Similar to other offshore zones, the Marshall Islands does not regulate Forex trading or the companies that engage in it. BitcapCM tries to convince users by devoting an entire page on their website, that clients’ funds are safe because they are kept in “segregated accounts”. In the absence of any supervision by a recognized government authority, however, one should take this statement with a healthy dose of mistrust. Prestigious watchdog agencies such as the the UK’s Financial Conduct Authority (FCA) and the Cyprus Securities and Exchange Commission (CySEC) Cyprus Securities and Exchange Commission (CySEC) have many rules in place to guarantee the stability of the brokerage, as well as the safety of the traders’ funds. Some of them are: Minimum Capital Requirements (€730 000) to safeguard the company’s good financial standing, Client Account Segregation (traders’ funds are kept in a separate account from the broker’s operating account) and Compensation Schemes designed to provide additional security to clients’ funds and guarantee refunds of money lost up to a certain amount (85,000 GBP in the UK and 20,000 EUR in the EU).
BitcapCM Trading Software
BitcapCM offers the MetaTrader4 (MT4) platform to download and install as a desktop application and a WebTrader. MT4 is one of the most advance trading platforms on the market, preferred by more than 80% of users around the world. It features an intuitive, user-friendly interface, advanced charting and analysis tools, as well as copy- and auto-trading options.
The WebTrader on the other hand looks quite plain and with limited functionalities. One thing we noticed was that the Deposit button in the top right corner was not working – clicking on it simply opened the same screen in a new tab.
BitcapCM Trading Conditions
The EURUSD spread we see on the platforms is 1.4 pips, which is in line with standard spreads offered by respectable brokers. The Spreads & Conditions webpage announces there is a “Spreads” file you can download. Neither of the Download links worked, however – they are an empty link that does not do anything.
A leverage of 1:50 as advertised on the website is also not very high. Some offshore brokers offer leverage as high as 1:1000, which presents significant risks to inexperienced traders. High leverage allows for big profits, but it can also incur significant losses, often much more than initially invested. Bitcap’s is in line with the leverage cap imposed by US regulatory authorities, while in the UK and the EU leverage cap for non-professional traders is 1:30.
BitcapCM Deposit/Withdrawal Methods And Fees
Deposit and withdrawal methods and fees are nicely summarized in a table at the respective page on BitcapCM’s website. In terms of Fees and Processing Times there is nothing outrageous – they are consistent with what most respectable brokerages offer.
Investigating these options further, we found some inconsistencies. In addition to the Deposit button on the WebTrader not working, in the client area there were only 4 links to different cashiers or payment processors, none of which provided the Wire (or Bank) Transfer option or the MegaTransfer option. Other popular methods, such as PayPal and preferred by traders e-wallets, e.g. Skrill and Neteller are also not supported, although the latter two logos are placed near the bottom of the home page, misleading users to believe such methods will be available. The website advertises Cryptocurrency Deposit which was not among the presented options.
As noted above, the minimum deposit amount advertised on the website is $250, but exploring the cashiers in the client zone some allowed a $100 deposit, while others required $200. Another inconsistency is that in the Accounts table Withdrawal Processing Time is listed as “One Business Day,” whereas in the Deposit & Withdrawal Options section for Bank Transfer it is “3-5 Business Days.”
At the bottom of the home page we also find logos of major banks, such as HSBC and Bank of America, which BitcapCM claims to be its Liquidity Providers. Scam brokers often use such tactic, but we could not find any evidence to substantiate this claim.
Although we did not see any promotions advertised, in the Terms and Conditions we find the usual Bonus Policy section. It stipulates that to be eligible to withdraw a bonus amount the client must transact a turnover equivalent to 40 (forty) times the combined value of the client’s initial deposit amount and bonus amount. This is also a common practice of shady brokerages to ensure bonuses are rarely cashed in. We should also note that brokers regulated in Europe or the US do not offer bonuses or promotions as they are prohibited.
Overall, BitcapCM did not strike us with any shocking trading conditions or fees, but considering it is not regulated by any regulatory or licensing authority, we would not advise investing with them.
How does the scam work?
The usual scam operates on a multi-level, though very basic model. The users will be tempted to click on an Internet ad promising quick and easy profits. If they do, it will take them to a website like CryptoEngine.app or Crypto-masterbot.com that will ask for their personal details, including email address and phone number. Once they submit this information, an avalanche of emails and phone calls will be unleashed. Scammers will promise the world to these potential traders in order to induce them to make an initial deposit between $200 and $300.
These “brokers” will get a fat commission from the deposited sums and will transfer the unsuspecting users to “senior” scammers. The latter are smooth talkers who will try to persuade users to invest more funds, using phrases like “now is the right time” and “the moment is perfect for making hefty profits”. Of course, these are empty words, and traders will soon have doubts whether they have not been played.
When they try to withdraw their money, these doubts will be confirmed: the con-artists will do anything to deny or at least delay their withdrawals. From trying to convince the traders that they are making a big mistake to withdraw funds now because they will lose big profits, to asking for additional documents or citing clauses in the accepted agreements, to transferring you to another department, there is a single objective to delay the users from filing for a chargeback with their financial institution and lose any chances of recovering their money.
What to do when scammed?
Anyone can fall prey to such a scam. In the unfortunate event this happens to you, there are a few things you can do. If you deposited using a credit card you should immediately file for a chargeback. In an effort to combat online fraud VISA and MasterCard have extended the period in which one can file a chargeback to a year and a half, so there is a big chance that you may be able to recover your funds. If however, you used a bank wire or bitcoin to deposit, chances to get your money back are almost none.
We should also warn against “recovery agencies” who prey on victimized traders by claiming they can recover their funds. These scammers will ask you to pay a fee for this service, but will only take your money and do nothing.