Why Some Unlicensed Brokers Appear on BinaryOptions.Net

Binary options are traded by retail investors around the world – even in jurisdictions where regulation is strict or where outright bans exist. In fact, we’ve seen that restricting access to legal binary options providers has pushed many traders to weakly regulated or unlicensed providers.

Because some traders still seek out binary platforms regardless of their legal status, our approach at BinaryOptions.net is practical and twofold:

  1. We still evaluate and sometimes display unlicensed brokers that have performed well during our in-house tests, earning the confidence of our experts.
  2. We maintain a blacklist of binary options scams to warn traders of providers that we feel cannot be trusted and should be avoided due to safety concerns.

We believe if traders are going to use offshore platforms anyway, then it’s preferable they choose the better-known, more legitimate providers – with any risks clearly marked – rather than fall prey to fraudsters.

Transparency Over Silence

Ignoring unlicensed binary brokers doesn’t make them disappear – it just makes it harder for traders to know who they’re really dealing with.

We’ve seen this ourselves. We watched regulators in large markets like Europe, the UK, and Australia ban or heavily restrict binary options trading for retail investors in the late 2010s and early 2020s.

This didn’t stop individuals in all of these countries from trading binaries. Instead, some headed to weak or unregulated providers, often based offshore.

This can be seen in one of ASIC’s annual reports following its 2021 ban, which noted it still had to take “disruptive action where we have identified scams and unlicensed offers of binary options,” showing binary trading has persisted offshore.

Elsewhere, binaries are only allowed to be traded in the US on exchanges licensed by the Commodity Futures Trading Commission (CFTC). However, the CFTC has issued a warning about “the increase in the number of these [unlicensed] platforms”, indicating restrictions aren’t always fully effective.

How We Vet Unlicensed Brokers

Every broker listed on BinaryOptions.net goes through our proprietary evaluation process, with a particular emphasis on trust and safety. Our experts:

  • Verify any regulation claims against the official databases of financial bodies. We’ve found most binary options providers are based overseas in places like Saint Vincent and the Grenadines, where the registration requirements are minimal and the oversight is lax.
  • Research how many years a provider has been active. We’ve noticed binary options scams tend to crop up and then disappear some months later with client funds. In contrast, legitimate providers have often been operational for years.
  • Test customer support ourselves to check there are knowledgeable assistants that can be reached should traders run into account, withdrawal, or any other issues.
  • Read bonus terms and conditions to make sure binary providers aren’t reeling in traders with enticing promotions like no deposit bonuses, but then enforcing steep wagering requirements, where users have to place many trades before being able to withdraw any profits.

This helps ensure that the unlicensed brokers that we do display on some of our pages have proven themselves relatively reliable in what remains a high-risk area of online trading.

Ultimately, by publishing accurate information about where binaries are currently permitted, investigating user complaints about payout issues, and creating reviews based on the firsthand experiences of our testing team, which includes seasoned binary traders, we help users compare offshore brokers and understand what to look for to keep their funds safe.

Why Regulation Still Matters

Even though we sometimes feature unlicensed brokers on our website, regulation is still preferable. Licensed brokers tend to follow strict conduct rules, maintain segregated client funds, and face oversight from independent authorities.

Our aim is to make clear where those protections exist – and where they don’t – so traders can make informed choices.

To make that easier, we’ve built a global regulator directory where you can quickly check which financial bodies operate in your country.

Bottom Line

With bans or legal restrictions not always stopping users from accessing a product or service, in this instance, binary options, we know many traders will still open accounts with unregulated brokers.

That’s why we believe a transparent, informed approach is more effective than pretending the unlicensed market doesn’t exist.

So you may see some weakly regulated or unlicensed providers on BinaryOptions.net, either because they’ve earned the trust of our testing panel or because we’re warning traders to steer clear of them for safety reasons.