Beware! NYC 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.
Our first impression of NYC Capital is not favourable as the interface of the company is not professionally done – the font is not comfortable to read and the website is in Spanish and some of the links do not have the translation into English option. What else is amiss?
NYC Capital Regulation and safety of funds
First of all, the company’s address is in St. Vincent and the Grenadines (SVG) which is an offshore zone for forex trade without official regulator for forex brokers. That means that NYC Capital is not registered, not regulated and as such trading with it will put your funds at risk of losing. What happens to your hard-earned money if this broker goes bankrupt or suddenly decides to shut down the website? Your precious money will go down the drain without a trace! Because only legit and licensed brokers provide measures for protecting their clients’ funds.
In addition to that, the National Securities Market Commission (CNMV), the official body that regulates Spanish forex brokers, has issued a warning that NYC Capital is not authorised to provide investment services and is practically illegal.
Let’s take a closer look at what licensed brokers in the well-established jurisdictions of the US, the EU and the UK have to offer. First of all, these brokers must be well-capitalised which among other things serves as a barrier against scammers. You cannot imagine a scammer depositing the staggering amount of $20 million as is the requirement in the US for initial capital, or 730,000 EUR in the EU and the UK, just for the benefit of looking legit. Other measures to protect clients’ funds include keeping them separately from broker’s with tier-1 bank establishments, providing protection against negative balance, reporting transactions on a regular basis for the sake of transparency and avoiding shady deals, etc.
In addition to that, in the EU and the UK, there are compensation funds and schemes to which licensed brokers must contribute funds which serve as compensation to clients in case the broker goes belly up. If the broker is regulated by FCA in the UK and deducts funds towards the Financial Services Compensation Scheme, its clients will be reimbursed by up to 85,000 GBP per client. For clients of brokers regulated by CySec and contributing to the local Investor Compensation Fund, the reimbursement will be up to 20,000 EUR per client.
In the US, however, there are no such funds or schemes and the fact that US brokers must be well-capitalised provides options for protecting clients in case of unfavourable events.
NYC Capital Trading software
The trading platform that NYC Capital offers to its clients is a web trader (image below) which is a rather simplistic and cheap trading platform. If you take a look at the image below, you will see what the platform looks like – on the left-hand side, there the trading products with their bid/ask price, in the middle is displayed the chart of a chosen trading product which in this case is the EUR/USD currency pair that shows the fluctuation in price in a given time frame and beneath are the buttons for buy/sell and instant or pending order. And that’s it! There is nothing to enhance clients’ trading experience!
From the bid/ask price for the EUR/USD currency pair, we calculate that the spread is 3.7 pips which is way above the industry average of 1.5 pips. If traders think that they will be able to achieve a sustainable profit with such wide spread they couldn’t be more wrong as the cost of transactions will be too high and won’t allow for it. Also, by clicking on the same pair symbol we opened a box with information showing the trading volume and margin from which we found out that the leverage is 1:100. Trading with such high leverage will expose clients’ funds to risk because in case of unsuccessful transactions the high leverage will amplify the scope of financial loss. It is not by chance that in the well-established jurisdictions we mentioned in the previous section, the financial regulators impose a cap on leverage which cannot go over 1:30 for the EU and the UK and 1:50 for the US. These are measures to protect clients’ funds by preventing traders from engaging in reckless and risky transactions with high leverage.
Unlike NYC Capital, licensed and reliable brokers offer good quality trading software which in 80% of the cases consists of MetaTrader 4 or MetaTrader 5 trading platforms. MT4 and MT5 are considered to be the Rolls-Royces in forex trade thanks to the many advantages they offer to the traders. For example, there is the auto trading option, the code base with customs scripts, the trading signals which can be obtained for a subscription fee, the VPS, the app market, the financial calendar, etc. A key feature for both platforms is the charting options which offer many charts, time frames, colours and the option of creating customised templates which combined with the array of technical analysis indicators allows traders to predict the future direction of exchange rates and make a profit.
NYC Capital Deposit/Withdrawal methods and fees
From the information available on NYC Capital website we understand that there are 5 trading accounts – Micro, Standard, Pro, Business and VIP. The minimum initial deposit for the Micro account is $250. It may not look like a huge amount but if you peruse the links for licensed that we provided you with, you will notice that the top-ranking brokers ask for as little as $1-5.
Unfortunately, there is no information regarding the minimum withdrawal amount or any related fees and charges.
How does scam work?
If scammers make a movie, it will probably be called “Dream on”. They make everything sound credible and build their scam on your dreams of getting an easy and quick profit. People get duped if they decide to deposit money into one of the scammers’ schemes. What you probably do not know is that your hard-earned money goes as commission to the scammers. Next, you get inundated by daily calls. First, the scammers congratulate you for joining their business, next they try to persuade you to invest even more money. After all, the more money you send, the bigger money fall you can expect. This of course is not how things work. By the time you realise that no money is coming your way, it might be too late. All you want now is to get your money back and get out of there but the scammers have other plans for you and they won’t late get away so easily. Now they try to delay you so that you miss the deadline for a chargeback.
What to do if scammed?
If you get scammed, our advice is to act immediately and if you have paid your deposit via credit/debit card you may still have a chance. Visa and MasterCard allow you 540 days time limit to file for chargeback which gives you a fighting chance to recover your money.
However, if you have used bitcoin or bank wire for your payment, the chances of you recovering your money are really slim.
Cancelling your credit/debit card in case you have given the scammers your CVV code may be another good idea. Also, make sure to remove from your PC any software that my give scammers access to your private data stored on your computer.
Whatever you do to recover your funds, beware of the so-called recovery agents. Please make sure that you are dealing with a genuine one by checking their credentials and company’s information transparency. Otherwise, you may fall victim to another form of scam.