Beware! CapitalFXM is an offshore broker! Your investment may be at risk.

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The CapitalFXM website greets us with the claim that it is a regulated forex broker. But before you put your money on the line it is imperative that you do careful fact checking. And the check shows that the claims on this website do not correspond to the truth. Let’s take a detailed look at why it’s advisable to avoid CapitalFXM.

CapitalFXM Regulation and safety of funds

Guaranteed FundsSegregated AccountsNegative balance protection
CapitalFXM
UK regulated brokers£85 000YesYes
EU regulated brokers€20 000YesYes
AU regulated brokersNoYesYes
US regulted brokersYesYesNo

The first thing to look for in a forex broker’s website is which legal entity runs it, where it is based and what regulatory oversight it is subject to. Licensed companies are also required to provide a comprehensive set of legal documentation.

CapitalFXMC claims to be based in the UK and authorised and regulated by the Financial Conduct Authority (FCA).

But a check of the regulator’s records leads us to a warning that this website is a scam:

The homepage of the website claims that CapitalFXM is a subsidiary of a company called ActivTrades PLC. This is not true. We have come across other fake brokers illegally using the name of this company, for example Alpha Exchange and QCFinances.

No Terms and Conditions or Customer Agreement can be found on the website. We see only a generic Privacy Policy that does not mention the name of a company.

If you want to trade on financial markets without being scammed, you can turn to some of the legitimate brokers that actually operate from established financial hubs like the UK. These brokers have to meet stringent requirements for financial stability and transparency of operations imposed by the Financial Conduct Authority.

They must provide clients with negative balance protection and to participate in a guarantee fund that covers up to GBP 85,000 of a client’s investment should the broker go into insolvency. These brokers are also required to keep their clients’ money segregated from their own operating funds in separate bank accounts.

CapitalFXM Trading software

Analytical toolsAuto tradingCustom indicatorsMobile apps
CapitalFXM
MT430+ indicatorsAndroid
MT550+ indicatorsAndroid
cTrader40+ indicatorsAndroid and iOS

The website mentions the MetaTrader 4 and 5 platforms, which are the most widely used trading software in the industry.

But after registering an account, we get access to a pretty basic web trading platform that is not MetaTrader and doesn’t feature extensive customization options or advanced functionality. Scammers are using rigged trading software to fool their victims into believing that their money is really being invested and even turning a profit.

There are plenty of legitimate, regulated brokers who enable their clients to take advantage of MetaTrader 4  and MetaTrader 5  capabilities. 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.

On the website we also see links to download remote access software. Scammers often convince potential victims to install such software and provide access to their personal devices, supposedly to get technical help.

CapitalFXM Trading instruments

CurrencyStocksIndicesCryptoCommodities
CapitalFXM
XMYesYesYesNoYes
FBSYesYesYesYesYes
FXTMYesYesYesYesYes

CapitalFXM does not provide a detailed list of tradable instruments, but in the trading platform we see all major asset classes. But as pointed out, fake brokers do not offer real trading.

CapitalFXM Spreads and cost of trading

CapitalFXMXMFBSFXTM
Spread EURUSD0.80.611.1
Spread GBPUSD0.81.31.21.4
Spread USDJPY0.81.31.21.4

In the trading platform we see a spread of 0.7-0.8 pips, which in theory is a competitive level. But the website lists fixed spreads of 3 pips, which is very unprofitable for the trader.

CapitalFXM Maximum leverage

ForexStocksCryptoGoldIndices
CapitalFXM400:1Not SpecifiedNot SpecifiedNot SpecifiedNot Specified
UK regulated brokers30:15:110:110:1
EU regulated brokers30:15:12:110:110:1
AU regulated brokers30:15:12:110:110:1
US regulated brokers50:1

According to the descriptions of the different types of accounts, CapitalFXM offers a maximum leverage between 1:100 and 1:400. This in itself is proof that this cannot really be a broker licensed in the UK.

High leverage creates the opportunity for more significant profit, but correspondingly increases the risk of sudden and excessive losses. All leading regulators therefore restrict leverage for retail traders. The FCA, like EU regulators, limits leverage to 1:30 for trading in major currency pairs and even lower levels for more volatile assets.

Regulated brokers offer higher leverage only to professional clients who must meet very high standards for capital and experience and forgo the guarantees enjoyed by retail traders.

If you don’t qualify as a professional trader but are willing to take the risk of high-leverage trading, the most viable option is to use the services of an offshore affiliate of an established brand.

CapitalFXM Deposit and withdrawal methods

 

Deposit timeWithdrawal timePrice
Bank wire2-5 business days2-5 business days$25+
Credit cardInstant24 hoursFree

The website states that CapitalFXM allows deposits and withdrawals via wire transfer and credit/debit cards. But on the deposit menu the only option is an unknown payment processor called Admirria.

Legitimate brokers typically offer clients a wide choice of transparent payment methods, including established e-wallets such as PayPal, Skrill, Neteller and Sofort.

CapitalFXM claims that it does not charge transaction fees, but as you can see, all of the claims on this website turn out to be false.

CapitalFXM Minimum deposit

CapitalFXMXMFBSFXTM
Minimum deposit$1000$5$10$5

The minimum deposit required for a starter account is 1,000 USD and in the deposit menu the minimum amount is 200 EUR. In comparison, many established brands allow you to start trading for a token deposit of just 5-10 USD.

CapitalFXM Withdrawal requirements

Trading volumeFee/Tax on withdrawalMinimum withdrawal
CapitalFXMNot SpecifiedNot Specified$200
UK regulated brokersNoNoNo
EU regulated brokersNoNoNo
AU regulated brokersNoNoNo
US regulated brokersNoNoNo

Since CapitalFXM  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.

 

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