Offshore scammers have their eyes on your pocket book. “[N]o business is currently registered or authorized to market or sell binary options in Canada,” the Canadian Securities Administrators said in an Investor Alert today.
The risk is not merely the loss of money, CSA said.
“Canadians are exposing themselves to the high risk of identity theft and fraud when signing up for these platforms that often request their credit card information,” said Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers, Quebec’s secutities regulator. “The CSA warns investors that if they deal with these platforms, they risk the threat of thousands of dollars in unauthorized withdrawals on their credit cards and of being stuck with high-interest payments for a non-existent investment.”
Binary options, CSA said, “are like ‘bets’ on how an asset (currency, stock, etc.) will perform in a limited amount of time – they are ‘all or nothing’ wagers, similar to gambling. However, even when investors see virtual gains, they often cannot access these profits as they don’t exist.”
Read the CSA alert.
On March 15, the U.S. Commodity Futures Trading Commission announced charges against two purported binary-options firms purportedly operating on the web from Israel.
CFTC identified the defendants as Vault Options Ltd. and Global Trader 365.
From the CFTC (italics added):
In addition to alleging that Vault and GT 365 solicited more than $1 million from at least 50 U.S. customers, the Complaint alleges that Vault and GT 365 defrauded their customers by, among other things, misrepresenting and omitting the likelihood of profit and loss that customer make trading binary options, falsely claiming that customer funds were insured against losses, fraudulently inducing customers to send them more money before initial funds could be returned, and misappropriating customer funds. According to the Complaint, while Vault and GT 365’s websites touted large profits, many customers lost nearly all of their funds sometimes within days or a few weeks.