Binary options problem? Contact the police, says Singapore regulator
In what is probably the most meaningful piece of advice with regards to fighting binary options fraud, MAS urges the public to contact the police in case of suspicions of illegal activities.
The amount of regulatory warnings against illegal activities of binary options firms in various jurisdictions has ballooned lately. There are blacklists of hundreds of such entities…
The Monetary Authority of Singapore (MAS) has earlier today joined the growing chorus of regulators that have voiced their concerns with regards to the rise in activities of illegal binary options firms and related fraud. The text of MAS’s announcement has about 80% overlap with the text of analogical announcements by other regulators – what binary options are, how risky they are, how many of the binary options brokers promise artificially high returns and never pay profits, how the bulk of the fraudulent entities are based overseas and are impossible (or hard) to prosecute, etc.
The useful part of MAS’s announcement is the one that advises the public to contact the police in case of suspicions of binary options fraud. The regulator says investors can submit information online to the Police at www.police.gov.sg/iwitness. Alternatively, they may also lodge a Police report via the Electronic Police Centre at www.police.gov.sg/e-services or at any Neighbourhood Police Centre/Post.
This takes the fight against binary options fraud to another level, which should be more effective than issuing warnings.
According to the latest checks conducted by FinanceFeeds, blacklists are far from being effective in reducing the activity of fraudulent online trading businesses. In France, where the blacklist of unregulated binary options brokers targeting French investors features more than 300 names, the rate of fraudulent binary options websites that still operate in the face of being blacklisted is relatively high – around 20% of the total.
(Note: More than a week after the check of these websites, I am still grappling with computer viruses. It is obvious that there are different types of fraud associated with binary options websites, on top of luring money from investors. For that matter, the MAS advise to customers to contact the police is very helpful – Ed.)
Even in the United States, where the Commodity Futures Trading Commission (CFTC) publishes the Registration Deficient (RED) List, fraudulent entities seem to be unimpressed with regulatory warnings. FinanceFeeds’ check of this list has shown that some 62% of the companies on the RED List are still operating and about 35% of the total still openly target US customers.
In the face of the continued trend of rising binary options brokers’ activities, many jurisdictions, like New Zealand, for example, only monitor the situation and do not take any decisive measures. Recently, Canada’s IIAC raised eyebrows by offering an “ingenious” response to the Quebec regulator’s proposal to ban the sale and distribution of binary options with expiries of less than 30 days to Quebec investors. IIAC said binary options are not the problem themselves and, if offered by IIROC-regulated companies, there should be no problem.