Capitalix, a Seychelles-based CFDs broker, was accused of committing fraud by deducting hidden fees from the trading account without informing, as alleged in a client complaint submitted with BrokersView.
What is the complaint about?
The client, who lives in Delhi, India, and knows nothing about the capital trading market, was lured by Mr. Rahul Shaikh, an account manager at Capitalix, and was wrongly advised to enter into certain transactions.
At the end of 2023, the client got a call to trade forex from Rahul Shaikh for the first time. Despite realizing that the client knew nothing about forex trading, Rahul Shaikh still enticed him to invest by claiming that they would do everything. Rahul Shaikh opened an account with $200 for the client.
When his trades were made and his account showed losses, Capitalix kept asking him to deposit the margin to recover the losses. “Within a month, they ate my $11,500,” the client stated.
About the losses, the client wasn’t told how they occurred despite his repeated inquiries. When he asked for the trading statement again and again, Capitalix showed him all the “swap charges” imposed, which “they had hidden”.
The client's request for a refund of his money was unsuccessful. Instead, Rahul Shaikh called him on January 24, 2024, and threatened that if he didn’t deposit $4,800, his all amount would go to zero.
Eventually, the Capitalix client closed all the trades because he had no more money to deposit. When he asked for his remaining $3,500 to be returned, Capitalix charged him a return fee of INR 3,000.
The client believed that Capitalix is a fraudulent broker, which he said “cheats people unaware about commodity markets. They have cheaters all over the world.”
Risk warning about Capitalix
Capitalix is owned and operated by 4Square SY Ltd, which is registered in Seychelles and licensed by the Seychelles FSA. The regulator provides offshore regulation, which means the broker is subject to relatively lax regulatory frameworks or less oversight, exposing traders to higher risks of potential fraud, manipulation, and misconduct.
In addition, an offshore broker could provide financial services beyond its regulatory jurisdiction. This may be the reason why Capitalix mainly serves Indian clients. According to feedback from most Indian traders, Capitalix insisted they deposit money to recover the losing trades. In conjunction with the above case, Capitalix may be suspected of maliciously manipulating client transactions and fraudulent charges.
Given that Capitalix was hit with negative feedback and client complaints, and that its regulatory status as an offshore broker may help to circumvent strict scrutiny, Brokersview recommends caution when approaching the broker.
