US and Canadian regulators have been extremely busy lately due to the increasing number of binary options brokers that solicit US and Canadian citizens. The reason these brokers are catching the attention of the authorities is not unusual this time around, that is, not being authorized and licensed in the respective countries. The result, two Israeli companies are being charged by the US CFTC for illegally providing financial services in the US.
Canadian Regulators Issue Warnings
In Canada, BCSC and OSC have both warned against a couple of binary options brokers, both adding to long lists of blacklisted brokers. Both cases are pretty similar: unregulated brokers operating illegally. In British Columbia, the BCSC has warned potential clients against CentralOption and CTOption. Both firms are located outside of Canada and neither are registered with any authorities in any of the Canadian provinces. In the case of CTOption, the alarms went off when BCSC got alerted about one Canadian citizen located in British Columbia who was able to open an account with the broker.
The OSC, which operates in Ontario, added CherryTrade to their warning list. CherryTrade, got blacklisted due to their unlawful solicitation of clients in Ontario. This broker, that is not even CySEC regulated, is known by us at thatsucks.com and has, not so surprisingly, showed up on our October scam watch too.
Regulators Are Beginning To Cooperate
Until recently, Canada has struggled to cope with all the old and new brokers that try to solicit clients in the different provinces. This struggle has been caused by the fact that each province has their own financial regulator but this trend is about to change. Thanks to Canadian Securities Administrators (CSA), which is a so called umbrella organization, 10 provincial and 3 territorial regulators can now be organized and united. Furthermore, the CSA announced that binary options are currently illegal in Canada.
Two brokers, Vault Options and Global Trader 365 have been soliciting clients in the US and they are now being charged with fraud. The CFTC has discovered that the US clients were losing their savings while the brokers in question falsely promised huge returns and that funds were insured. Since the firms were exposed, Vault Options’ website has disappeared and Global Trader 365 is up for sale. This investigation was possible thanks to the cooperation of Israeli, Cypriot and Ontarian authorities; ISA, CySEC and OSC.
Cooperation Means Action
We are used to seeing authorities issuing warnings and adding brokers to their blacklists but now two positive trends are emerging. One is that actual charges and fines being issued, not just warnings. The CFTC isn’t the only one either, CySEC has also been fining brokers running amok. We have received more reports on binary options brokers that were fined and this is a game changer! Real action is when authorities cooperate to locate and gather the required evidence to charge, fine and shut down fraudulent brokers, not just slap them on the wrist. The second trend is that regulators are cooperating, a move that will help cut down on rampant fraud as it exists today. On the downside, many people still lose money before the authorities are involved and at the end of the day, it’s up to the potential clients to stay educated and updated.