The current restructuring of the market could see the last days of Binary Options in Europe.
On December 15th, 2018, the European Securities and Markets Authority (ESMA) made a major step towards safeguarding the stability of the European Union’s financial system, by publishing a statement pointing to the serious concerns around clients’ protection, when it comes to binary options.
On the forefront — retail investors, as they remain the target of aggressive marketing techniques. ESMA equally denounced the lack of transparency and shady manipulations (transaction fees) , as information has been found to be withheld, which irremediably results in a lack of understanding the complexity of certain products. With regards to Binary Options, their marketing, distribution or sales to retail clients has been prohibited. The response has been radical, as Binary Options technology and brokerage company TechFinancials Inc (LON:TECH) has made public the license withdrawal of its subsidiary B.O. TradeFinancials Limited (BOT) and shut down its binary option and Cyprus-based brand OptionFair, with the intention of returning all BOT clients funds, after they have been notified. OptionFair was a regulated broker, licensed by CySEC (Cyprus Securities and Exchange Commission).
It is important to recall that since 2013, ESMA has been trying various approaches to protect clients, including getting a grip on marketing, introducing more risk warnings and setting negative balance protection ( a guarantee that one cannot spend more money than what is on the account, so that in the advent of loosing money the client would not owe the broker).
TechFinancials now wants to focus on more profitable products, such as blockchain-based products. As the TechFinancials Inc. is leaning towards ceasing any Binary Options B2C in Europe, it will nevertheless continue operating activities in Asia Pacific region, supported by the associate company DragonFinancials. Offshore companies, however, carry the additional risk of the investors having their identity stolen or high interests for an investment that they would have no access over. In January 2018, the Financial Conduct Authority (FCA) revealed an estimated daily loss of £90,640 to Binary Options scam in the UK alone.
Have you been a victim of scam? Did you know that there are actions which the Binary Option company takes, that can then be used against them in order to recover your money? Contact us today and file a case to see how.