Clones and Houdini, Regulator Warnings Issued in Three Different Continents
Warnings of scam binary options brokers are coming from three different continents; North America, Asia and Europe. From Japan to Spain, Spain to Canada, and Cananda to Australia both regulated and unregulated binary options brokers are in trouble this time. The general reason for falling under the spotlight of regulators seems to be the same old thing, a lack of authorization to provide services inside the respective regulator’s country, rather than fraudulent activities. Meanwhile, clones are another major threat to traders and brokers that is getting more and more attention.
Be Cautious, Says BCSC in Canada
BCSC, the British Columbia Securities Commission, has recently added multiple binary options brokers to their warning list. All the involved brokers have been exposed for soliciting clients to register and transfer funds to their accounts without regulatory authorization. Lbinary, a broker known to operate outside the law, was one of the warned brokers, which not surprisingly is often mentioned in our scam watch. The BCSC wrote on its homepage; “We urge BC residents to exercise caution when dealing with firms that are not registered to trade or advise in BC.”
Japan – CySEC Regulation Not Excused
Moving on to Asia, Japan specifically, where binary options are very popular and strongly regulated the story is the same. Not even a CySEC regulation won’t excuse a broker from making it on the warning list. In this case, OptionRally, a CySEC regulated broker that has previously been warned in Japan is now being warned once again for soliciting clients in that country. The ruling by Japan’s FSC is that any broker offering services in Japanese must be licensed in Japan prior to offering financial services to Japanese citizens. Failure to comply results in an instant reservation for a spot on the warning list.
Spain Black Lists the Houdini of Brokers
Coming back to Europe where most brokers are born and do most of the operating, Spain’s regulator CNMV, warned of a few brokers including EmpireOption , of which you can read more about in our June Scam Watch. EmpireOption targets clients all over the world, yet lacks a physical address as well as any kind of authorization or regulation making them a greater escape artist than Houdini. Leaprate recently wrote in an article that the French AMF had black listed this broker in 2014 and we have been following the details closely every since. The other brokers on the black list are also due to providing unauthorized financial services in Spain and lack of real addresses.
Clones Attack – A New Threat has Emerged!
Unauthorized firms are not only a threat to potential clients but also to legitimate and regulated brokers. AMF, France Regulator, announced just weeks ago about a growing trend that is alarming them and other regulators around the world–clone sites! These sites mask themselves by stealing names, logos and license numbers that belong to regulated brokers and appear to be nearly identical to original, trusted, broker. Currently, the FCA regulated brokers seem to be the one targeted most by these fake replicas but they are not the only ones. The real trouble is that clones are extremely hard to expose, even for experienced traders. AMF further adds, once you have transferred funds to a broker clone it’s most likely impossible to ever retrieve them, hurting both the clients and the targeted broker’s brand.
Take Precautions! Easy for Regulators to Say – Hard for Traders to do
Although authorities worldwide are constantly black listing unlawful brokers and advising traders to take precautions, figuring out how to avoid scams still remains puzzling. Trader must avoid unregulated brokers but regulation is not enough if the company is not registered in the country it accepts clients from, not to mention the fact that an apparently regulated broker might be nothing but a clone! Traders are currently stuck in a “the good, the bad and the ugly” situation where they can only guess which one’s “the good one”. For now, the best approach is to check your country’s regulator and their black list but also talk to other traders and do a thorough research before selecting a binary options broker.