The binary options industry has come under fire over the past year from a plethora of different sources, including Europol. When the industry was just starting out some ten years earlier, binary firms were regarded as a pleasant middle ground between financial trading and gaming. Deposit amounts were suitable for investors to try out this kind of trading without risking a significant amount of their earnings.
However, over the years, brokers became greedy and began using pushy and dishonest sales practices to lure in unsuspecting traders to deposit larger amounts of capital. This in turn, led to national and regional financial regulators like CySEC, responsible for overseeing the industry, to crack down with harsher rules, forcing binary firms the world over to amend their platforms and cut back on heavy marketing ploys, including a strict bonus ban. One such recent reform within the binary industry was CySEC’s decision to require all brokers’ call centers to be operated to EU jurisdictions, a move which has disrupted many firms’ operations.
Hence, many brokers opted to forgo these new regulations and instead go back to being unregulated; according to Finance Magnates sources, these brokers are running call centers from several Eastern European countries outside the EU such as Serbia and Ukraine. More importantly, they have resorted to implementing the same misleading and unethical sales tactics to target investors from all over the world, focusing on the Far East in particular, where regulation is scarce.
Nevertheless, international and regional watchdogs have been alerted to the practices of these unregulated firms and are preparing to put the wrath of God into cracking down on the industry harder than ever before.
That being said, traders should still be cautious when it comes to investing in binary options; you may find yourself receiving an unsolicited call from an unregulated broker’s call centre claiming that binary options trading is easy, safe and promises returns of up to 90% on your investment. Beware of giving out any account details to these salespeople, as many have gone down the same road and ended up losing their deposit almost instantly. It’s also important to check with a local regulator when in doubt and before investing any money.