Millions of US Dollars were lost (or should I say “stolen”) in 2016 and so far 2017 hasn’t been much safer. One thing’s for sure: regulators across the globe are sounding their horns to warn people about the dangers of trading with unregulated brokers. Heed their warning or join the pool of scammed traders!
Australians Beware of Non-Regulated Brokers
The Australian Competition and Consumer Commission (ACCC) recently published that binary options scams have caused investors to lose more than $11.5 million in 2016. The ACCC and Australia’s Cybercrime Online Reporting Network (ACORN) noted that binary options related complaints represent about 1% of all received reports. Even if that is a small percentage, the overall loss is huge. According to Finance Magnates, binary options traders in Australia and New Zealand spent more money funding their trading accounts in March 2017, than any other country. Pump the breaks, guys. Source: Finance Magnates
The Australian Securities and Investments Commission (ASIC) added five binary options brokers to its blacklist. The companies are A.I.M Corporation Limited, Oproserv Limited (aka 365BinaryOption), Pearson Investments, CFD Stocks (aka Pacific Sunrise UK Ltd), and Libor Capital. The regulator warned investors that the mentioned companies/brokerages might be operating scams because they are not authorized to offer investment services to Australian traders.
Furthermore, Greg Medcraft, ASIC’s Chairman, has mentioned that the regulator’s focus in 2017 will include CFD and FX companies because “…such products were traditionally targeted at inappropriate investors who were less likely to profit from dealing in the financial product.” Sources: Chronicle Day, Finance Magnates, SMN Weekly
Canadian Regulator BCSC Keeps A Watchful Eye
Over the last year the British Columbia Securities Commission (BCSC) has been running a tight ship, dishing out bans and warnings left and right. Their list has grown recently with the addition of two binary options brokers: BinaryBrokerz (the brokerage claims to be based in London) and TorOption (who claim they have an office in Glasgow, Scotland).
Doug Muir, Director of Enforcement at BCSC stated in an interview with Finance Magnates that “Many websites claiming to offer binary options are simply vehicles for fraud” and “they are not conducting any real business.”. He also mentioned that in Canada binary options are considered illegal in all provinces. Sources: Finance Magnates, BCSC Warning against TorOption, BCSC Warning against BinaryBrokerz.
The BCSC recently included unregulated broker TR Binary Options in its Investment Caution List, after a British Columbia resident was able to open an account with this brokerage. TR Binary Options was formerly known as Trade Rush, claims to be located in Bulgaria and is owned and operated by Melnic Group Ltd. The BCSC mentioned that binary options are considered securities and the brokerage is not registered to trade in, or advise on, securities or exchange contracts in British Columbia. Sources: Leaprate, BCSC Warning against TR Binary Options.
Boss Capital is also owned and operated by Melnic Group Ltd. and was recently added to BCSC’s warning list for similar reasons as TR Binary Options. The brokerage has received similar warnings form Canadian regulator FCAA and Italy’s CONSOB. Sources: Leaprate, BCSC Warning against Boss Capital.
British FCA On The Job
According to the British Financial Conduct Authority (FCA), the binary brokerage Stern Options is either operating regulated activities without proper authorization or is a scam. The watchdog advises that the Financial Ombudsman Service will not be able to settle a dispute with this firm. Customers should be very cautious and avoid dealing with unregulated entities. Source: FCA Warning.
On the same matter, SMN Weekly stated that according to client reviews on Stern Options’ Facebook page, the brokerage is a scam and is actually RBOptions under a different name. Source: SMN Weekly.
The Fight Never Stops
A few years ago, nobody was questioning whether binary options brokerages were regulated or not. People just didn’t care and were blinded by the promises of quick cash. On the other hand, the regulators weren’t too active either and we could rarely see warnings like the ones in this article. Now things are going on a much better and safer path, but the threat of scam brokerages remains high. Don’t believe empty promises and always ask your broker about regulation before investing any money.