The regulators have been getting busy this year already and I have to say it is a good thing. The way things are going, it is getting harder and harder for the shady brokers to operate which means more and more of them are shutting down. Since the start of the year there have been a flurry of new warnings, some names we’ve heard before and a few new ones that have been flying under the radar.
Regulators Double Down In January
The Danish Authorities, known as the Financial Services Authority, was the first to issue a warning this year, and the first to double down with another within the same week. The first went to broker Tech Option, operated by C.G. Capital Investments Limited of Vanuatu, is an unlicensed and unregulated broker falling back on a Cyprus registered payment processor to give the illusion of legitimacy. The next warning was a double dose, first one against well know scam broker Titantrade and an unknown broker called 23Traders. Titantrade is registered in Belize where a couple of decent brokers are located but has failed to build a good reputation. It is a feature on other warning lists as well including Italy’s CONSOB, Australia’s ASIC and New Zealand’s FMA. The broker 23Traders is a St. Vincent registered company with Vanuatu regulation, but no CySEC or MiFID, and no good reputation.
Of course British Columbia’s BCSC had to get into the mix. They issued another warning as well, this time against long running and well know scam broker Redwood Option. Redwood Option is owned and operated by Solaris Vision Ltd, located at this time in Bulgaria, and the subject of many past warnings. The BCSC’s beef, like the FSA and so many other brokers, is that Redwood is operating inside Canada without registration and without regulatory compliance. The effect of their warnings is limited though, they don’t do much to stop operations aside from telling people it may not be a good idea to trade there and it takes us here at BinaryOptionsThatSuck.com to really get the word out.
Italian CONSOB Strikes
Italy’s CONSOB was also active last month, issuing not only a number of warnings but a general statement on binary options as well. The warnings were a double shot against two businesses working in cahoots with each other. The broker is Payday Options, which has since shut its doors. The other business is, or was, Hansa-Equity Spa, which has also gone under the radar. The scam worked in a number of ways but essentially they worked together to generate deposits using “managed accounts” as the bait.
Italy went so far as to issue a statement to investors concerning CIF’s which offer forex or binary options trading. They detail the risks involved and go so far as to say that much of what is on the market today is pure fraud, and in a lot of cases they are absolutely right. This is why other countries such as France and Amsterdam have banned the advertisement of binary options, Italy could be next.
Protecting the Public (Finally)
It is clear that regulation is cramping down on the binary options industry. This is a good thing, so long as they don’t take it to far. Taking steps to protect the public from scams is one thing but getting in the way of honest brokers and traders who want to trade binary options will only lead to a new black market for the industry, and one that will be harder to reign in.