Beware! Capital1 is an offshore broker! Your investment may be at risk.

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Capital1 is a forex trading company. Two things strikes us after opening the company’s website and verifying the information provided – that the company only seems legit at first sight and that there is a lot of missing information.

Capital1 Regulation and safety of funds

Capital1 is the website for Capital Funding One Limited which appears to be registered by FCA in UK. However, potential clients should be aware that the type of registration is only for supervision for anti-money laundering. Normally, with regulated brokers in the type section (screenshot below) it says ‘regulated’ and for this company it only says ‘supervised’ which is not the same thing.

The financial regulator FCA in UK has very strict rules about how forex brokers are regulated. For example, they need to have an initial capital of no less than 730,000 EUR and contribute to compensation fund from which in case the broker goes bankrupt, the clients will be compensated with up to 85,000 GBP per client. Also, the legit forex brokers must submit daily reports about their transactions to provide transparency for their deals and avoid scam. If on the FCA register doesn’t say that the company in question is regulated, then you better avoid this broker and look for another one.

Apart from UK, there are also other jurisdictions where regulated brokers provide a guarantee for the client’s safety of funds. We want to mention the forex brokers that are registered and regulated in EU. They also provide good conditions for the client’s safety of funds. If a forex broker is regulated by CySEC, for example, they must contribute to a compensation fund from which clients will be compensated by up to 20,000 EUR per client if the company declares bankruptcy.

Capital1 Trading software

Capital1 offers its own trading platform which is a web trader. If you look at the screenshot below, you will see that it is a rather basic one. On the left you see the currency pairs with their bid/ask price, in the middle, there is a chart showing how price of the selected currency pair fluctuates in a given timeframe and on the right, there is an economic calendar with some news from the business world.

In our selected currency pair, EUR/USD, we find out that the spread is 0.6 pips which is quite good for this major currency pair. However, after looking at the account information we found out that the leverage shown there 1:200 is rather high. First of all, you need to understand that high leverage is related to taking high risk with trader’s money and may result in financial loss (statistically, around 70% of traders experience financial loss in their transactions). Second, in UK there is a cap on leverage which cannot exceed 1:30 and if Capital1 is a really legitimate and regulated broker it should comply with these restrictions. Clearly, not all is legit with this broker and we recommend that you avoid trading with it.

As we mentioned above, the trading platform that Capital1 offers to its clients is a rather basic one. We suggest that when you look for a broker, in addition to being licensed, you should select one that offers MetaTrader 4 or MetaTrader 5 trading platforms. They are choice number one among forex brokers for its many proven advantages. For example, these platforms offer VPS, code base with customs scripts, auto trading option, an app market, trading signals, a financial calendar, etc. They also have many options for charting in different designs that will facilitate your forex trading.

Capital1 Deposit/Withdrawal methods and fees

From the screenshot below, you can see that Capital1 offers 4 different accounts which are not for the poor – Bronze, Silver, Gold and Platinum. The minimum initial deposit is $10,000. Here we see another sign that this broker may be scam. Legitimate and regulated brokers wouldn’t ask for such a high minimum initial account. They would ask for $100-200 tops.

Another thing that strikes us as odd is the fact that there is no legal section on the company’s website and there is no mention what the deposit/withdrawal methods are and if they include fees of any sorts. No self-respecting legitimate broker will miss to provide such crucial information. The fact that it is missing is another proof that it is not safe to trade with this company.

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’ mouse trap 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 awhile 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 chargeback.

What to do if scammed?

There are a few things that you must do immediately – file for 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 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 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 scammer access to your personal data.

Rich Snippet Data

Reviewer

TheForexReview

Review Date

2020-10-08

Reviewed Broker

Capital1

Broker Rating