Three FCA investigations into binary options firms are ongoing

Maria Nikolova

Three investigations are ongoing, including a large multi-jurisdictional one in which one of the key suspects has been arrested.

The UK Financial Conduct Authority (FCA) has published a report about its enforcement activities in 2018/19, revealing the regulator’s efforts to put an end to binary options fraud.

The FCA said it continues to tackle firms and individuals who seek to carry on regulated activities without authorisation. Its Unauthorised Business Department (UBD) received the highest number of reports about potential unauthorised activity in a single year in 2018/19 (16,600 received – 25% increase on last year).

The regulator attributes this increase to two main factors:

  • Firstly, the ongoing success of the FCA ScamSmart campaign – more consumers recognise potential investment scams and know how to report them.
  • Secondly, the proliferation of fraudulent online trading platforms, generally based outside of the UK but targeting UK consumers. These platforms offer fast trading and high returns. They use social media to target investors and present themselves as a natural, more sophisticated, progression to online gambling.

One of the most prevalent types of online trading fraud in recent years has involved binary options, the FCA explains. Binary options were brought within the FCA’s regulatory remit in January 2018 and soon after that the UBD embarked on a major proactive piece of work looking into more than 200 unauthorised binary options trading firms.

While the vast majority of these entities were based outside the FCA’s jurisdiction, several appeared to have some form of UK presence and the regulator subsequently launched investigations into them. Three of these nine investigations are ongoing, including one large multi-jurisdictional one in which one of the key suspects has been arrested.

As a result of our consumer education initiatives and proactive investigation work, binary options are no longer actively promoted to UK consumers.

Outside of the FCA’s efforts to eliminate binary options fraud, the regulator opened a further 11 investigations during the year so 20 in total. Of the matters that were not progressed to investigation stage, the FCA was able to resolve a further 132, the majority of which were concluded through correspondence with the unauthorised firm. The FCA published 521 consumer alerts – the highest in a single year – in matters where resolution with the unauthorised firm was not possible.

Following a consultation into proposals on the prohibition of the sale of binary options to retail customers in the UK, in April this year, the FCA introduced a ban on binary options. All firms acting in or from the UK are prohibited from selling, marketing or distributing binary options to retail consumers.

The rules were introduced in response to concerns about the inherent risks of these products, and the poor conduct of the firms selling them. This has led to consumer harm in the UK and internationally through large and unexpected trading losses.

Read this next

Digital Assets

SEC bypassed commission vote in approving Ethereum ETFs

The Securities and Exchange Commission’s (SEC) Trading and Markets Division has approved several spot Ethereum exchange-traded funds (ETFs) using delegated authority, rather than a vote by the full commission.


BlockDAG Presale Draws Massive $32.4M Hinting At its 30,000x ROI Potential, Overshadowing Retik Finance at Bitmart

Learn why BlockDAG’s innovative strategies and $32.4M presale success are making millionaires, overshadowing Retik Finance’s struggle on Bitmart.

Institutional FX

Malaysia’s exchange launches API for onboarding retail investors

“The Exchange actively listens to the evolving needs of our customers. This initiative is key in delivering on our commitment towards greater customer-centricity. We will continue to work closely with our POs and introduce service innovations to attract more investors, bolstering the competitiveness of our market.”

Fintech, Uncategorized

LiquidityBook welcomes JonesTrading to LBX Post-Trade Hub

“As we near the T+1 deadline, we are excited to continue helping firms achieve straight-through processing in addition to delivering new enhancements to our comprehensive range of cloud-native buy- and sell-side trading solutions.”


Should I Invest Today? Which Altcoins Could Make 2-5X Profits Amid the Latest News?

Investing in cryptocurrencies can be a journey full of surprises, given their volatile nature.

Executive Moves

Bakkt promotes Ray Kamrath to CCO of Crypto

Bakkt has promoted Ray Kamrath to Chief Commercial Officer of the company providing custody, trading, and onramps to the crypto space.

Industry News, Uncategorized

HSBC relocates US headquarters to The Spiral, New York

HSBC has opened its new U.S. headquarters at The Spiral, a renowned office building in New York City’s Hudson Yards neighborhood.


Best Cryptos to Buy Before the Real Bull Run Kicks Off

With the bull run of 2024 already underway, investors are eager to identify cryptocurrencies that promise significant growth.

Market News

This time is different – is it?

The stock market wants lower interest rates – or rather, it has been expecting them for months. Justified? The US economy looks very robust, so higher interest rates would actually be the order of the day.