Russia remains lucrative target for binary options fraud due to lack of regulation
Russia accounted for 29% of the visits of four of the biggest binary options websites in April, according to Forbes.
While regulators across the globe take measures to tackle binary options fraud, including arrests of masterminds of investment scams and imposing bans on offering of binary options, Russia is staying aside.
As previously noted by FinanceFeeds, the Bank of Russia, which regulates the financial services industry in the Russian Federation, has no stance on binary options regulation. In fact, the “Megaregulator” has referred to “binary options” in only one document, which concerned the plans to reform the concept of securities brokers. There was nothing straightforward there with regards to how binary options are treated by the central bank.
In the meantime, thanks to this lack of regulatory measures to tackle binary options fraud, Russia is one of the biggest targets for binary options scams. According to research by the Russian edition of Forbes, Russia accounted for 29% of the visits of four of the biggest binary options websites in April 2017. Forbes based its estimates on data derived from SimilarWeb.com. The data show that In April this year, the four platforms in question had more than 50 million visits. This means that Russia accounted for 14.5 million of them. Very far behind it in the ranking are Thailand, Brazil, Turkey and Vietnam. The countries are apparently ones where regulation is lax.
The Forbes research goes on to estimate the size of losses to binary options fraud suffered by Russian investors. The binary options platform developers put the turnover of the binary options industry at $8 billion a year. This number may be exaggerated. But if we agree that the number is $2-3 billion a year, then the Russians still lose tens of millions of dollars to binary options fraud every year.
Whereas nations like France have moved to ban advertising of binary options, including all sorts of binary options partnerships with sports teams, Russia may be looking in the opposite direction. In March this year, Russia’s president Vladimir Putin signed a very interesting bill into a law. The document is about advertising of gambling/gaming activities in Russia, and sports partnerships in particular. Under this law, gambling operators, bookmakers, etc, making use of advertising deals with sports teams, have to allocate funds for sports events and sponsoring the development of sport activities in Russia. That is, if they allocate such funds, they will have no problem advertising their activities.
If Russia decides to treat binary options as bets, following the example of the UK, for instance, then binary options firms will have no problem with regards to advertising as long as they fund the development of Russia’s sports.
This is, of course, a matter of speculation. But until the Bank of Russia announces its official stance on binary options, there is plenty of room for speculation and, unfortunately, for fraud.
