Biggest Fines In Binary Options Industry

The business landscape is rapidly shifting for binary options and forex brokers around the word. From North America to Europe to Asia, financial regulators have stepped up their crackdown on providers of retail financial services that are flouting the rules and leading investors to untold losses. The regulatory crackdowns have resulted in many binary options broker being put out of business while many others have been slapped with hefty fines.

Here are some of the largest fines that have been meted out to binary options operators in 2016.

U.S. regulators descend on Banc de Binary with $11 million fine

Cyprus-based binary options provider Banc de Binary was this year slapped with a $11 million fine. The broker was accused by U.S. regulators of illegally targeting U.S. investors with its financial services. The regulators specifically said Banc de Binary sold binary options to U.S. investors without first registering the securities as the law requires. The violation happened in 2013 and lawsuit dragged until settle only came three years later.

As of 2012, Banc de Binary had 250,000 clients with about 60% of them located in the U.S.

The $11 million fine that U.S. regulators hit Banc de Binary with was part penalties ($3.95 million) and part disgorgement ($7.1 million).

Vault Options and sibling fined $4.6 million

Vault Options, Ltd. and Global Trader 365 (GT 365), two Israeli binary options traders owned by the same company, were this year fined and barred from operating in the U.S.

The firms were slapped with a combined fine of $4.6 million, part of which was for restitution (1.6 million) and part civil monetary penalty ($3 million). Vault Options and GT 365 faced accusations of violation of Commodity Exchange Act and defrauding their clients.

The regulator found that the firms run scams in the U.S. targeting vulnerable and unsuspecting investors, some being elderly people.

Vault Options and GT 365 were said to share telephone number, staff names and bank account for accepting customer deposits, thus the conclusion that the two firms were running as a common enterprise.

CIF IQ Option Europe hit with $202,356 fine

Cyprus Securities and Exchange Commission (CySEC) recently slapped several binary options firms operating in the country with fines. The regulator cited a range of violations including illegal operations and treating of clients to misleading information that can cause them to incur unwarranted losses.

CySEC fined CIF IQ Option Europe Ltd €180,000 ($202,356), while CIF OptionRally Financial Services Ltd was slapped with a €138,000 ($155,139).

Financial regulators around the world are targeting forex and binary options traders amid a surge in complaints from investors who say there are scammed or denied a request to withdraw funds from their accounts. In some cases regulators have said that the brokers do let their clients to clearly see the risks they are taking, thus leading them to deceptive investments that ultimately cause them losses.

Belgium, France, Germany and the Netherlands are some of the European countries that have either banned retail forex and options trading or limited advertising of such services in their jurisdictions. However, the cleanup of retail derivatives trading is also producing collateral damages as genuine brokers or faced tightening regulatory measures.