Warnings and EZTrader; Cinderella’s Fall From Grace

More warnings and the inside scoop; Cinderella’s coach has turned into a pumpkin, and it’s rotten.

 

Warning! Binary Options Warnings Are On The Way!

Japan is one of few countries to embrace binary options regulation and yet they too suffer from binary related fraud. The country’s Ministry of Finance has just issued warnings against two brokerages offering binary options and forex trading services. The brands are M Carlo Capital (also known as Monte Carlo Capital) and Hot Forex Markets (AKA HF Markets) are both operating in Japan without proper licensing or regulation. The brokers are based in the Seychelles and, according to the release, are likely clones of other sites the MoF and FSA have warned about previously. Japan requires all brokers and exchanges to register and comply with regulation to include exchange style binary options.

 

Canada’s loudest voice in the fight against binary options fraud, the British Columbia Securities Commissions, has issued its latest warning against 332option.com. This broker is operating without the license in Canada or British Columbia and perpetrating not one but two scams. The first is illicit financial services via fraudulent binary options services, the other is Bitcoin fraud. The broker is not regulated to provide service for traders in Canada and selling them using Bitcoin as the hook (no real Bitcoins are ever provided). The warnings state that 332option, operated by BIS LTD, claims to CySEC regulated but no mention of that was found on the website. It does list a US address in New York that is probably fake. When I Googled it came up as a 166 unit residential apartment block.

 
 

Easy Street? How About Hit The Street

EZTrader is a Cinderella story gone awry. The once leading broker and 1 of only 2 that I know to be publicly listed have filed to delist its shares and appears to be on a path to full implosion. It’s a long story and one filled with hurdles and missteps at every stage of the companies life. It is one of the first and largest brokers to have emerged during the peak of the binary options heyday.

 

From the start, it was able to post multimillion dollar quarters, double-digit quarter on quarter growth and forward guidance for more of the same. This success led to rapid expansion, CySEC regulation when it came along, and a most aggressive ad-partnership campaign in which dozens of sports teams were courted. Troubles began in 2014 when CySEC suspended their license over alleged transgressions that were quickly resolved. Those same troubles resurfaced the very next year resulting in CySEC’s largest fine to-date. Soon after the US CFTC and SEC got involved, fining the company once again, this time for soliciting US clients.

 

Sponsorship included German Bayer Leverkusen and Dutch Feyenoord Rotterdam at the start and quickly moved to include the German Handball Federation. The deal with Feyenoord quickly fell apart as regulatory issues mounted but new teams were waiting in the wings. The next deals were made with Everton, French Monaco AS and Tottenham Hotspur in 2016. 2016 is also the year the company paid $1.7 million in fines and began posting losses despite cash injections from investors. This didn’t stop football team Roma from joining as a partner but it did put a halt to hopes the company could be listed on the NASDAQ.

 

Since then the company has been in a decline aided by the fall in binary options traffic worldwide. This fall is due in part to stricter regulation around the world. It’s a sad story for EZTrader and for the industry but this cloud does have a silver lining. The regulated brokers are better than ever and the scams are easier to spot.

 

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