Singaporean investor losses from unregulated binary options platforms surpass US$1.7m
Promises of easy profits have lured both financial experts and retirees, according to the Singapore Police Force.
Concerns around unregulated binary options trading platforms continue to grow in multiple jurisdictions. The latest one to quantify investor losses due to such unregulated firms is Singapore.
Singapore investors have lost more than US$1.7 million (S$2.4 million) as a result of using the services of unregulated binary options firms, according to data from the Singapore Police Force, quoted by the Straits Times.
The report comes after in December last year, the Singaporean Police issued a warning regarding binary options fraud, putting the amount of investor losses at more than US$1 million. Back then, the police said it had received some 30 complaints for the activities of such fraudulent entities. According to the latest data, there had been 10 new complaints.
According to the police, most of the investors who have become victims of binary options fraud are “local Chinese males aged between 31 and 50”. The profile of the victims is difficult to determine as investors include finance professionals as well as retirees.
Investors are usually lured by their initial profits and by promises made by the platform staff about financial advice, more bonuses and attractive rewards. There are also psychological traps, as many of the investors found it difficult to stop at one small investment and will invest more money. In these cases, the investors either lost all their funds or could not withdraw the balances in their accounts. In addition, unauthorised withdrawals had been made in investors’ debit/credit cards after they had provided their card details for payment.
Alike authorities in other jurisdictions, the Singaporean Police note that most of the binary options trading platforms targeting Singaporean residents are unregulated entities based outside Singapore. The three most common places that they claim to be operating from are the United Kingdom, Cyprus and Hong Kong SAR.
The update on investor losses is published after last month the Monetary Authority of Singapore (MAS) 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. In its announcement, MAS urged investors to contact the police in case of suspicions concerning binary options firms.
Tackling binary options fraud is a challenging task. Recently, Quebec’s financial markets authority AMF has proposed a ban on the offer of binary options to Quebec residents. The proposal, however, faced opposition from the industry, which lobbies for permitting the offer of binary options services by companies (brokers and exchanges) regulated in Canada.
At the same time, another Canadian authority – the Financial and Consumer Affairs Authority of Saskatchewan (FCAA), warned again about unregistered binary options companies, and said that despite its ongoing efforts, Saskatchewan residents continue to fall victim to these solicitations. Over the last two years, Saskatchewan residents have lost over $420,000 to such fraud, the FCAA estimates.