Beware! CapStar FX 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.
CapStar FX is a very dubious offshore broker that gives us no good reason to trust it with our money. In this review, we will take a detailed look at why this website is suspicious and why it is in your best interest to choose another financial services provider.
CAPSTAR FX REGULATION AND SAFETY OF FUNDS
If a financial services provider is legitimate, you will find on its website clear and detailed information about the company that owns and operates it, where it is based, and what licences it has. Genuine brokers also provide access to a comprehensive set of legal documentation. The availability of such information does not guarantee that it is not false or misleading. But the absence of these elements is very indicative that in all likelihood you are dealing with scammers.
CapStar FX states that the owner company is based in an offshore zone – Saint Vincent and the Grenadines (SVG). The website also provides a contact address in Iraq. But nowhere do we see the name of a specific company.
We found a company named CapStar FX Limited among those registered in SVG. But even if this is the owner of the website, this does not provide any guarantees of correctness and security for the client’s funds.
SVG is a jurisdiction 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.
Links to the Terms and Conditions and other documents on the CapStar FX website are blank or inexplicably redirects to other websites that have nothing to do with brokerage services, for example 4xportal.com. Ultimately, we’re not sure who we’re dealing with and we don’t know what terms we’re agreeing to when we sign up for an account.
You should only trust legitimate brokers operating in one of the established financial centres like the UK, EU, USA or Australia. There, the activities of brokers are controlled by powerful regulatory bodies such as UK’s Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), Commodity Futures Trading Commission (CFTC) in US or Australian Securities and Exchanges Commission (ASIC). 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.
CAPSTAR FX TRADING SOFTWARE
CapStar FX claims to offer traders one of the most widely used platforms in the industry, MetaTrader 4 (MT4). But the links to download the software are not active. After registering an account, we only get access to a demo version of the MT4 web application. But CapStar FX does not provide credentials for logging into a trading server. CapStar FX apparently does not have functioning software for trading financial instruments.
There are more than enough licensed brokers offering clients the MT4 experience and/or the newer version of the software MT5. These platforms have established themselves as industry standard because 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.
CAPSTAR FX TRADING CONDITIONS
According to the information on the website, CapStar FX offers two types of accounts, Standard and ECN. However, CapStar FX does not provide information on the trading parameters associated with either account. Only leverage up to 1:100 is specified.
Regulated brokers do not offer such levels to retail traders as trading with high leverage carries risks of sudden and excessive losses. A maximum leverage of 1:30 is allowed in the European Union and the United Kingdom and 1:50 in the United States.
The websites of legitimate brokers offer detailed information about the trading conditions they offer. Brokers usually offer different types of accounts tailored to the needs of traders with different experience and capital. Many leading companies in the industry allow you to start trading with a very low initial deposit, often under 100 USD.
CAPSTAR FX DEPOSIT/WITHDRAW METHODS AND FEES
CapStar FX accepts deposits through unknown payment processors and cryptocurrencies.
Scammers prefer cryptocurrencies because these transactions are not subject to refunds. 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, Neteller and Sofort.
Since CapStar FX does not provide proper legal documentation, it is unclear what traps the fraudsters may have set. Typically, fake brokers make withdrawing money impossible through huge fees and impossible-to-fulfil traded volume conditions.
HOW DOES THE SCAM WORK
Stories of people getting rich from cryptocurrencies tempt many to try their luck in the financial markets. But you have to be very careful not to fall into the clutches of the many scammers lurking in the online space. These scammers only pose as brokers and lure you in with promises to take on the confusing aspects of investing for you.
If you make contact with such scammers they will first convince you to give them a small initial sum of a few hundred dollars. They may even fool you for a while that your investment is generating incredible profits to convince you to give them a larger amount. But your money won’t really be invested. And when you try to withdraw your supposed profits or even your deposit, you will find that it is impossible.
The scammers may tell you that all your investments have been lost by a sudden change in the market. Or they’ll point you to clauses hidden in their Terms and Conditions that say withdrawing your money is only possible after you meet impossibly high minimum trading volume requirements. And they can simply disappear because these scam sites hide behind fake names and offshore companies that are not subject to rules and regulations.
WHAT TO DO WHEN SCAMMED
If you find yourself a victim of scammers, you should inform the relevant authorities in your country and spread the word online to warn other potential victims. However, the chances of getting your money back are not high.
If you used a credit/debit card for the transactions, you could ask for a chargeback. However, such requests can be disputed if you have provided the fraudsters with proof of identity such as a copy of an ID. Under no circumstances should you trust people on the internet who claim they can recover your money for an upfront fee. These too are certainly scammers.
