A Busy Year For Binary Option Regulators

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It’s Been A Busy Year For Binary Options Regulators

Binary options regulators have had a busy year; warnings, new regulators, expanding US markets and more. Are you up to date with the latest new? Read on to be sure!

Regulators Are Stepping Up Their Game

It has been a busy year for binary options regulators. Not only have we seen an upsurge in warnings there are new regulators on the scene with expanded focus and, in some cases, increased cooperation. This is at once a good and bad thing for binary options and traders like us. On the one hand the industry is getting safer. Your deposits as well as your profits are more protected than ever; segregated accounts and third party oversight account for that. On the other it means that some jurisdictions are clamping down on trading in general, making it harder for some of us to access the best platforms and brokers, or any brokers at all.

Warnings Just Don’t Stop

The litany of warnings we saw in 2020 did not end with the start of the new year. Regulators from CySEC through Quebec’s AMF, New Zealand’s FMA and the UK’s FCA have upped the ante adding new and old brokers alike to their respective lists. France’s famed Binary Options Blacklist now has more than 250 names on it. The thing to remember about each of these warning lists are that they are location specific, as in, they really only pertain to the exact jurisdiction from which it was issued. Quebec’s list is a prime example; many of the names on the list are well known and respected brokers, just in other countries. Many of them are in fact CySEC regulated. The complaint, they are not regulated in Canada, is an echoe of what other regulators are saying; these brokers are not regulated to operate here.

Other infractions that regulators are responding to are aggressive marketing tactics, cloning and false claims of regulation. Marketing tactics include high pressure sales pitches along with guaranteed trading tips and broker managed accounts, the first pushes clients into investments before they understand their true nature, the second two presenting serious conflicts of interest. Cloning is another practice regulators find misleads traders; it is when a shady broker uses a name like JPMBinary Options to imply it is associated with the international investment bank JP Morgan. The most serious infractions though are when brokers claims to be regulated when in fact they are not, or claims to be regulated by shadow regulators created solely for the sake of misleading the public.

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The US CFTC is also getting on board. The regulator launced a new website in 2020 to help spread the word. The website hosts what they call the “RED” list, an acronym for regulation defecient, a list of all binary options brokers that illegally solicit clients in the US. Remember, in the US it is against the law for unregistered brokers to advertise to and solicit clients but not against the law for citizens to join a broker and trade, a gray area of regulation and source of much confusion. I applaud their effort but must say it falls far short of the mark. As of last check there were only 19 brokers listed, all of which have flown so low under the radar it’s likely you’ve never heard of them.

In addition to the RED list another US regulator has recently joined the regulatory fray, issuing warnings of its own. The FINRA, Financial Industry Regulatory Authority, says that binary options are all to often a fraud, something we’ve known for quite some time. The interesting thing about the warning is that FINRA accepts binary options trading, the point is to caution investors about the risk, and the chances for fraud. The urge US traders to be wary of off-shore providers, not to avoid them, implying their acceptance of the burgeoning international trade.

Officially Unofficial Update : SpotOption Brokers No Longer Accept US Traders

You may have already noticed but SpotOption powered brokers accepting US traders have been closing their doors. This trend came to a head over the summer as the last of them finally quit accepting them. When asked for a response the reply I received, from Dorin Satrin, only said “SpotOption is a technology provider and not a trading website”. Regardless, a message received from CherryTrade clearly stated they were closing their doors due to compliance with SpotOption. The move is likely in preparation for SpotOptions CFTC approved mass launch into the US market slated for the near future. SpotOption, as well as TechFinancials and Tradologic, have been working closely with Cantor Exchange to create trading platforms to interface on Cantor’s exchange style trading platform. SpotOption trading is already available on the Cantor Exchange trading website, more brokers are expected to follow in the 4 th quarter of 2020 or early 2020.

Increased Cooperation And An International Man Hunt

Regulators are beginning to cooperate more, especially in the EU. Agencies in member countries are now accepting registration of binary options brokers regulated by CySEC. CySEC regulation was the first and most prominent regulatory body, undertaking the task in 2020, but its jurisdiction has been heavily questioned. Under the EU’s financial charter, MiFID and financial passport a financial business regulated and registered in one country can do business in other member nations. The stipulation is that the businesses must register in each of those nations as required. The catch is that not all EU nations were willing to accept to binary options as financial tools, and some did not even take notice until recently. Now, following a land mark case in the Dutch courts earlier this year, more and more nations are accepting registrations from regulated brokers and further cementing CySEC’s role as top watchdog in Europe.

If simply regulating brokers was not enough, regulators in the UK are still on a manhunt begun earlier in the year. Clint Canning, CEO of FXWorld and BASE2TRADE, fled the country following allegations of fraud. The company’s, one a forex managed account brokerage, the other a binay options trading website, took in millions of investor dollars, all of which have since dissappeared. Several FXWorld employees, including Canning and trader Gary Andrews, had already been suspended from Rabobank for forex fraud and price fixing. Not only were traders fleeced of their funds, nearly a dozen employee’s not connected to the frauds were left out in the cold. Canning is suspected of residing in Dubai and has yet to apprehended by police.

A Busy Year For Binary Option Regulators

Are you up to date with the latest binary options regulatory developments ? Read on to be sure!

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Please stop posting this wales. It will get taken down as soon as an admin or mod sees it

Regulators Get Busy In 2020: Cracking Down on Brokers

The regulators have been getting busy this year already and I have to say it is a good thing. The way things are going, it is getting harder and harder for the shady brokers to operate which means more and more of them are shutting down. Since the start of the year there have been a flurry of new warnings, some names we’ve heard before and a few new ones that have been flying under the radar.

Regulators Double Down In January

The Danish Authorities, known as the Financial Services Authority, was the first to issue a warning this year, and the first to double down with another within the same week. The first went to broker Tech Option, operated by C.G. Capital Investments Limited of Vanuatu, is an unlicensed and unregulated broker falling back on a Cyprus registered payment processor to give the illusion of legitimacy. The next warning was a double dose, first one against well know scam broker Titantrade and an unknown broker called 23Traders. Titantrade is registered in Belize where a couple of decent brokers are located but has failed to build a good reputation. It is a feature on other warning lists as well including Italy’s CONSOB, Australia’s ASIC and New Zealand’s FMA. The broker 23Traders is a St. Vincent registered company with Vanuatu regulation, but no CySEC or MiFID, and no good reputation.

Of course British Columbia’s BCSC had to get into the mix. They issued another warning as well, this time against long running and well know scam broker Redwood Option. Redwood Option is owned and operated by Solaris Vision Ltd, located at this time in Bulgaria, and the subject of many past warnings. The BCSC’s beef, like the FSA and so many other brokers, is that Redwood is operating inside Canada without registration and without regulatory compliance. The effect of their warnings is limited though, they don’t do much to stop operations aside from telling people it may not be a good idea to trade there and it takes us here at ThatSucks.com (former BinaryOptionsThatSuck.com) to really get the word out.

Italian CONSOB Strikes

Italy’s CONSOB was also active last month, issuing not only a number of warnings but a general statement on binary options as well. The warnings were a double shot against two businesses working in cahoots with each other. The broker is Payday Options, which has since shut its doors. The other business is, or was, Hansa-Equity Spa, which has also gone under the radar. The scam worked in a number of ways but essentially they worked together to generate deposits using “managed accounts” as the bait.

Italy went so far as to issue a statement to investors concerning CIF’s which offer forex or binary options trading. They detail the risks involved and go so far as to say that much of what is on the market today is pure fraud, and in a lot of cases they are absolutely right. This is why other countries such as France and Amsterdam have banned the advertisement of binary options, Italy could be next.

Protecting the Public (Finally)

It is clear that regulation is cramping down on the binary options industry. This is a good thing, so long as they don’t take it to far. Taking steps to protect the public from scams is one thing but getting in the way of honest brokers and traders who want to trade binary options will only lead to a new black market for the industry, and one that will be harder to reign in.

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