Beware! RXK 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.
The RXK Capital website is full of promises that this supposed forex and CFD broker will provide us with excellent conditions for trading financial instruments, whether we are a novice or an experienced investor.
But closer inspection shows that this anonymous website looks much more like a typical financial scam than a credible forex broker. Let’s take a detailed look at why it wouldn’t be a wise idea to trust your money to RXK Capital.
RXK CAPITAL REGULATION AND SAFETY OF FUNDS
On the homepage of the website, we see a statement that the RXK Capital is authorised to service traders from “various jurisdictions in the world”. However, in the “Regulations” section, we see an acknowledgement that RXK Capital is not actually regulated.
RXK Capital gives us no good reason to believe the promises that it nevertheless fulfils all necessary regulatory obligations. The lack of a licence is reason enough to be suspicious, but on top of that, the RXK Capital is completely anonymous. Neither the website nor the Terms and Conditions and Privacy Policy specify a legal entity name.
When you visit the website of a legitimate broker you can expect to find clear and detailed information about the company that owns and operates it, where it is based and what regulatory regimes it is subject to.
According to the Terms and Conditions, the unnamed company is based in Saint Vincent and the Grenadines (SVG).
SVG is an offshore zone with no broker regulations in place. As soon as you open the website of the local Financial Services Authority you see a warning that the institution does not licence forex and other types of brokers and does not supervise the activities of International Business Companies engaged in such activities.
If you have decided to invest in financial instruments, and especially if you are a novice trader, you should use the services of a licensed broker based in a jurisdiction with strong regulations.
Depending on your location, it is advisable to choose a company that is regulated by an institution such as Commodity Futures Trading Commission (CFTC) in US, Australian Securities and Exchanges Commission (ASIC), UK’s Financial Conduct Authority (FCA) or some EU regulator like Cyprus Securities and Exchange Commission (CySEC).
Clients of these brokers receive protections such as negative balance protection and segregation of the client’s funds from the broker’s funds. In the EU and the UK, brokers must also participate in guarantee schemes that cover a certain amount of the trader’s investment if the broker becomes insolvent. These guarantees amount to up to 20 000 EUR in the EU and 85 000 GBP in the UK. However, the likelihood of such a bankruptcy is low because regulators also have significant net capital requirements that companies must maintain – EUR 730 000 in UK and Cyprus, AUD 1000 000 in Australia and at least 20 million USD in the United States.
RXK CAPITAL TRADING SOFTWARE
Like most shady brokers and scammers, RXK Capital uses a rudimentary web-based trading platform. Here is what it looks like:
While this platform has the basic functionality to place orders, it cannot compare to the capabilities provided by MetaTrader 4 (MT4) and MetaTrader 5 (MT5). It is no coincidence that these platforms have established themselves as the industry standard. They offer a wide range of features, including a variety of options for customization, multiple account usage, designing and implementing custom scripts for automated trading and backtesting trade strategies.
The presence of a trading platform does not make this website any more legitimate and does not guarantee that this alleged broker offers real trading. Many scammers have trading software to fool their victims that their money is being invested.
RXK CAPITAL TRADING CONDITIONS
RXK Capital claims to offer five types of trading accounts. Their descriptions provide us with clear evidence that we are dealing with scammers.
First we are struck by the ridiculously high minimum deposit of 10,000 USD. Most legitimate brokers allow you to start trading with amounts of 100-200 USD, and often even less.
RXK Capital says it charges a high commission on profits of up to 10%. Genuine forex brokers charge no such commission. With them, the trader pays a spread, a commission on a traded lot, or some combination of the two. The website also promises dividends – there is no dividend payout in forex and CFD trading.
According to the descriptions of the account types the leverage reaches 1:150, but on the website we see promises of even higher levels of 1:500.
This is not a level that you see with regulated brokers. Trading with high leverage allows higher profits, but also increases the risk of sudden and excessive losses proportionally. All leading regulators limit leverage for retail traders. In the EU, UK and Australia the maximum permitted level is 1:30 and in the US it is 1:50. This maximum level only applies to trading major currency pairs, with even more limited leverage for more volatile assets.
RXK CAPITAL DEPOSIT/WITHDRAW METHODS AND FEES
Depositing funds with RXK Capital requires you to contact website support directly.
Legitimate brokers typically offer clients a wide choice of transparent payment methods, including bank transfer, credit/debit cards and established e-wallets such as PayPal, Skrill, Netelle or QIWI. Scammers usually prefer cryptocurrencies because these transactions are not subject to refunds. If you’re interested in legitimate brokers that accept digital currency payments alongside conventional methods, check out this list.
The text of the Terms and Conditions describes a whole series of fees that legitimate brokers do not charge. These include an unexplained fee of 5% per month, a 2% management fee on each deposit, a 20% additional fee on profits, 100 USD monthly fee for inactive accounts and a 5% withdrawal fee. These extortionate fees leave no doubt that the RXK Capital are indeed scammers.
If the account has received a bonus, it can withdraw funds only after meeting the minimum traded volume requirements. These requirements are unusually high – one standard lot for every dollar bonus. Regulated brokers are prohibited from offering bonuses.
HOW DOES THE SCAM WORK
With all the buzz surrounding cryptocurrencies and NFTs, many people are starting to consider investing in the financial markets as a bid to improve their fortunes. Scammers on the internet have taken notice of that and take advantage of the ignorance of the general public by creating countless websites posing as brokers. These websites offer no real brokerage services and only deceive people into believing that their money is really being invested.
If you come across such a scam website and give out your contacts, you will be contacted by experienced scammers who will convince you that they can take on all the frighteningly complex aspects of investing for you. But you will never get any real profits, nor will you be able to get back the money you deposited. The terms and conditions of these websites are riddled with clauses that make withdrawing funds from your account unfeasible – for example, extremely high minimum trading volume requirements or hefty fees of 10%, 20% or even more of the amount.
Scammers hide behind fake addresses and names and operate through offshore companies that are not subject to regulation and scrutiny. So even if all the withdrawal requirements are met, they may simply disappear and move on to their next fraudulent scheme.
WHAT TO DO WHEN SCAMMED
It is very important not to rush into trusting people on the internet who offer to magically refund your money for a fee. These are also scammers, and they may even be the same ones who scammed you in the first place.
If you have made the transfers using credit or debit card, you can claim a chargeback. Visa and MasterCard allow this to be done within 540 days. However, such a request may not be approved if you have given the fraudsters documents such as a copy of an ID and proof of address. This will allow them to claim that the transaction is legitimate and approved by both parties.
