Canada’s binary options ban fails to deter fraudsters

Maria Nikolova

Months after the announcement of the ban on binary options offering to retail investors in Canada, fraudsters adopt a new strategy – they claim to be from companies regulated by IIROC.

Nearly seven months have passed since Canada’s authorities announced a ban on the offering of binary options to retail investors. The measures, however, seem to have had little effect on certain entities that have adopted new strategies in order to solicit investors’ money.

The Investment Industry Regulatory Organization of Canada (IIROC) on Thursday warned Canadian investors not to be fooled by fraudsters attempting to illegally sell binary options under the guise of legitimate investment dealer firms regulated by IIROC.

The organization has been made aware of at least two entities that falsely claim to be regulated by IIROC:

  • CDFtradeoption.com – operated by Westrade Holdings, Inc;
  • Globaloptionsmarket.net.

The organization reminds the public that binary options cannot be offered or sold to retail investors in Canada. No IIROC dealers are authorized to sell binary options to retail investors in Canada.

This fraudulent trend sparks concerns about the potential of a ban on offering of such toxic products as binaries to stop scams. The European Securities and Markets Authority (ESMA) has recently agreed measures to prohibit offering of binary options to retail investors but the developments in Canada cast a shadow of doubt on whether the ban in Europe would have the desired effect.

Let’s also recall that when the Canadian authorities first proposed to ban binary options, the proposal faced serious opposition. The Investment Industry Association of Canada (IIAC), which represents 130 Dealer Member firms regulated by IIROC, insisted that the ban must apply only to illegal binary options trading offered by unregulated binary options firms. IIAC argued back then that its members should be allowed to offer binary options to retail investors.

There have also been calls to allow trading binary options on-exchange, as this is allowed in the United States.

On the other side of the spectrum of opinions is the feedback by organizations like the Canadian Advocacy Council for Canadian CFA Institute Societies (CAC), which backed the binary options ban proposal and even went beyond it by questioning the status of OTC Forex. The organization queried whether the sale of similar financial instruments to retail investors should also be restricted.

Read this next

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Bybit expands into Europe amid regulatory scrutiny

Dubai-based cryptocurrency exchange Bybit is expanding its operations in Europe after encountering regulatory challenges in Hong Kong.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

<