Beware! Cloex Capital 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.
Cloex Capital wants you to believe that it is a leading regulated broker and the logos of reputable brands, such as Apple, Google, Facebook and Netflix, are listed in the trade with shares options to lure unsuspecting potential traders. However, this information is misleading as this broker is not to be trusted. Here it is why.
Cloex Capital Regulation and safety of funds
Cloex capital claims to be regulated with CIMA, the Cayman Island Monetary Authority, which regulates forex brokers in this offshore zone. However, after checking the CIMA register, we found out that this broker does not exist in it (image below). This is proof that trading with this broker will put your funds at risk.
In principle, trading with brokers from offshore zones, even if they are regulated, does not present a guarantee for the safety of clients’ funds as there are no measures set in place to protect them. In contrast, trading with legit brokers from the well-established jurisdictions of the US, the EU and the UK is much safer.
Brokers in the US are strictly regulated and they must be well-capitalised and invest $20 million in the form of initial capital. Among other things, this staggering amount of money serves to ward off scammers as they will never part with so much money for the benefit of looking legit. Also, the capital requirement is so high because, in the US, there are no compensation funds or schemes to protect clients if the broker goes bankrupt. However, by being well-capitalised forex brokers will still have the means to protect their clients in case of unfavourable events.
If these trading conditions do not look good enough to you, then why not research brokers from the EU and the UK? In these two jurisdictions, the amount of the initial capital is not so high, only 730,000 EUR. However, clients’ funds are protected by the fact that regulated brokers participate in compensation funds or schemes from which clients can get compensation if the broker becomes insolvent. If the broker is regulated by CySec and deducts funds towards the local Investor Compensation Fund, its clients can be repaid by up to 20,000 EUR per client. In the UK, the amount of compensation is much higher, 85,000 GBP per client but only if the broker is regulated by FCA and participates in the local Financial Services Compensation Scheme.
Cloex Capital Trading software
Cloex Capital is a forex broker trading in force, commodities, indices and shares. The problems started when we decided to open a trading account with this broker. The registration of the account went well. However, when we opened the dashboard, there was no platform to be downloaded. Strange, isn’t it? Even if we had to deposit funds before accessing the platform which is the requirement of the broker, there should have been a link to download the platform. But there was none!
What little information we could find from the company’s interface is that the spread starts from 0 pips. This is excellent. However, we do not know how wide the spread can go. The industry average spread for forex currencies is 1.5 pips. If the spread is wider than that, the cost of transactions will be high and the traders won’t be able to make a sustainable profit.
The other information we found on the company’s interface is that the offered leverage is 1:500. Such high spread signifies only two things – a big win or a big loss. On the surface, it looks like high leverage amplifies the potential for profit. However, such an impression is misleading as 70% of traders lose in transactions which means that the chances of losing are bigger than the chances of winning. Don’t forget that high leverage also increases the risk exposure for your funds. The licensed brokers in the well-established jurisdictions we mentioned above are banned from offering leverage higher than 1:30 in the EU and the UK and in the US, 1:50. Capped leverage is one of the measures for protecting clients’ funds and from preventing traders from entering reckless and risky transactions.
Cloex Capital Deposit/Withdrawal methods and fees
A lot of information is missing on Cloex Capital website which is another reason that you should avoid trading with this broker. For example, the information about trading accounts and the Terms and Conditions is not there.
From the company’s website, we could only find that the minimum initial deposit is $300 with 0 deposit fees. The payment method for making a deposit is a Bitcoin wallet. There is no information what the minimum withdrawal amount is, only that the withdrawal methods are via bank wire and Bitcoin.
How does scam work?
Scam works in different ways. It could be either that you receive an unsolicited telephone call or you see one of these flashy ads on the Internet or the social media promising you a quick and easy profit. Scammers will promise you the sky and the earth until you give way to temptation and deposit money. Once you give them money you get caught in the scammers’ mousetrap and the cheese in the shape of a big fat money fall is gone! It may take some time before you realise that you are being scammed. Scammers are smooth talkers and they are masters of deception. They will give you some excuses as to why the big profit hasn’t come yet and will try to lure you to make even a bigger investment because according to them, the more you invest, the more you profit. After you have been waiting for a while and you finally come to your senses, you realise that you are being scammed. All you want now is to get your money back and get out of there. However, the scammers won’t make it easy for you! They will try to delay you so that you miss the deadline for applying for a chargeback.
What to do if scammed?
There are a few things that you must do immediately – file for a chargeback if you have paid using a VISA or MasterCard. Those two payment providers allow you 540 days time frame within which you may file for a chargeback.
However, the chances are grim if you have used bank transfer or Bitcoin as a payment method. There is no chance you’ll be able to recover your money.
In such a desperate situation, some so-called ‘recovery agents’ may approach you with offers to recover your money for a fee. Be cautious as you may be dealing with another type of scammers. Always check the information about the recovery agency – make sure it is legitimate and transparent in the public eye. Also, some scammers publish personal comments after our review about how they have been scammed and how they found a recovery agent who helped them get their money back. Do not trust such comments and do not use the published contact info in them as it will lead you to another scammer!
And lastly, a reminder to cancel your credit card if you have given your CVV code to the scammers and erase any software from you PC that gives the scammer access to your personal data.