Old Binary Options Crooks Make the Headlines Again, the War On Clones Continues! Warnings and fines are being issued around the world.
Old Crooks Make The Headlines Again, The War Of The Clones Continues!
Not long ago we talked about the war on clone binary options brokers launched by France’s AMF, now the UK picks up the fight to prevent fraud by a clone firm. As usual, there are also many familiar names, “good old crooks” this time around among the recently warned brokers. These include TitanTrade – a broker that is often named when talking of scams, fraud and shady dealing. Warnings have been issued by regulators from different countries from Australia to Luxembourg and a fine issued by CySEC for misleading investors.
Warnings Issued By Regulators – Old Scam Brokers and Newcomers Involved
Titantrade was just added to the New Zealand FMA’s blacklist. Being a regular in our Scam Watch, it’s not surprising to see investors being warned about them over and over again. What’s worrying though is that TitanTrade’s focus is just redirected elsewhere each time a country warns against them and is seemingly unaffected by the attention.
Speaking of the bad and the ugly, OneTwoTrade is another scam broker familiar to us.
According to Financemagnates, this broker was warned in Hong Kong by their regulator, the SFC. The reason was unlawful solicitation of clients in the region, the most common complaint regulators can seem to come up with.
Additionally, the CSSF warned FxMarketLive which is a Forex and Binary Options firm. The Luxembourg regulator announced that FxMarketLive’s is faking its regulation and license, a not uncommon practice among scam brokers, and that their address is fake too. The Smnweekly.com mentions that this website seems to be an exact replica of a site called ZidexFinancials. Whether one firm is the clone or both are created by the same scammers remains to be seen, Since ZidexFinancials is also using a fake address it points towards the scam theory.
Speaking of clones, the UK’s FCA has warned against a brokerage that claims to be the UK regulated broker Interactive Brokers. The firm behind the clone, IBL Markets is a binary options broker. With this information, one could at first think that the firm Interactive Brokers which offers trading platforms and services, is somehow linked to IBL Markets. However, the FCA has actually confirmed that there is no relationship between the two firms and that Interactive Brokers is the real victim.
Finally, in Australia ASIC warned two brokers. The first one is AC Global, a Forex broker offering services without a license, and ToOption, a binary broker owned by a regulated company but not yet licensed in Australia. Through it all the underlying them is that binary options brokers are operating across borders and the regulators want them to register.
Nadex Warns Against Binary Broker in the US
Investors and traders have been warned about a firm named “Daily Options” due to solicitation of Nadex members. Daily Options is a firm that offers managed accounts by logging into your existing account and trading on your behalf. We took a look at their website and they seem to be working with an unregulated broker named “Tropical Trade” – for non-US clients. For US citizens, they recommend Flash Binary. It already smells scams as binary options brokers are not allowed to solicit clients in the US, not to mention that “managed” accounts are bogus. Further alarming is that they also claim to be able to make about 10 times your deposit within 24 hours. However, putting things together, the whole thing seems to be a scheme to make people deposit with unregulated scam brokers.
CySEC Fines two Firms for €105,000
Two firms, HotForex and OptionTrade are being fined by CySEC. Misleading the clients was the biggest reason for the fines in these cases but other infractions were also noted. Fore example, Leprate.com writes that the risk of losses were downplayed by the company employees when financial services were offered to clients.
Canada after the Quantum Code Robot
The NSSC in Canada sounded the alarms on the Quantum Code Robot which is an autotrader scam. Normally, Canadian regulators are only focused on hunting unlawful binary options brokers but not any more. In this case, the unrealistic promises and the too-good-to-be-true claims of results caught their attention. In their research, the regulator concluded that the Quantum Code software was targeted to people with a lack of knowledge of trading.
Existing & Growing Threats
While many authorities are issuing warnings against scam brokers, some regulators are coming after other types of scams such as robots, auto-traders and account “managers”. This is a good development but on the other hand, unlawful firms are not meeting enough resistance as they continue their unlicensed activities wherever they can get away with it. In fact, many of these bans and limitations damage clients and regulated brokers rather than the scam firms because it leaves traders no choice but to seek out unregulated, potentially scammy, brokers. In regions where regulated brokers can’t operate, business is blooming for scam brokers who continue to offer their services despite the prohibitions. Some even mimic the regulated firms by cloning their websites and thereby attract more unknowing clients, deepening the damage done to the industry as a whole. Meanwhile, a growing issue is shell companies that are frequently used by unregulated firms who try to hide from the authorities, more on that story as it unfolds.