The Warnings Just Don’t Stop
The British Columbia regulator BCSC has issued another warning. Why? Because Canada’s ban of binary options is working so well, just like we knew it would. The country is right to seek to protect its clients but the ban is virtually meaningless as most fraudulent and scam binary options businesses were already operating outside the law to begin with. The BCSC’s own director has said to the effect that most binary options businesses nothing more than vehicles for fraud.
The latest warning is against LionsTradeFX.com, a binary options broker reportedly offering its services to Canadian clients without a license. What the BCSC aims to do about it now is unclear as they have been able to do little to date save make its warnings. Because brokers are operating offshore and from jurisdictions with dubious regulatory infrastructure tracking them down and prosecuting are difficult to do.
The French AMF is another regulator leading the charge against binary options. They, along with the French government, have banned advertising of high leverage financial products among other steps to curb the spread of binary options. They too have been actively warning the public of fraudulent brokers and have added to their list as well. In the latest update brokers capitaldeposit.net, EMFI-placesecurity.com and xfr-financial are all named as operating without a license. The AMF does recognize CySEC licensing provided brokers register with them. They have slowly been relaxing their ban on advertising as the legal brokers have been compliant with their demands.
The Swiss regulator FINMA is also on the prowl, issuing warnings where warnings are due. This time around the regulator is targeting brokersoptions.com, a Marshall Island’s registered company, for offering options without a license. The broker also claims to have businesses offices at a London address but a quick Google search will reveal that to be a front company operating from a virtual office. FINMA is also investigating an upsurge in cryptocurrency fraud tied to unlicensed and unregulated sources.
Israel Bans Binary, White Labels Leave The Business
While the warnings certainly do help the public be aware of frauds in action these steps are not tackling the real problem; rampant fraud. The way to do that is to focus on the source and the source, in many cases, is the white label technology providers. The tech providers may not themselves be engaged in fraud but their platforms are services are, which is why Israel has banned the trading, use, selling, advertising and exportation of binary options.
Believe it or not it is working but at a great cost. There are less fraud brokers out there but there are still a lot, a more will pop up with or without a tech provider to help them. The cost is the loss of reputable brokers and technology providers. SpotOption and TechFinancials, the largest and most successful of the white label providers, have both given up on binary and likely not to return.