UK to regulate Binary Options fraud - but not ban it
Some of the fraudsters were inspired by Leonardo DiCaprio's film 'The Wolf of Wall Street'
Britain will finally begin regulating the Binary Options market on January 3, 2018 some 15 months after the Bureau first exposed the enormous scale of the fraud. The industry, some elements of which are thought to be responsible for stealing billions of pounds every year (see the Bureau’s exposures of wrongdoing) will be brought under the supervision of the Financial Conduct Authority (FCA).
The FCA says Binary Options firms may “manipulate software to distort prices and payouts – then they suddenly close consumers’ trading accounts, refusing to pay back their money.’
Other countries have acted far more quickly and effectively than the UK against the scam, and Israel which has been the headquarters for most of the traders will bring into effect a complete ban on selling Binary Options in late January. Many European countries have banned the business and prevented firms advertising their products and the US authorities have aggressively gone after the fraudsters even when they operated from other jurisdictions.
Up until now Binary Options has been regulated by the Gambling Commission but this left a huge loophole because the Commission can only regulate companies with "remote gambling equipment" in the UK, which does not apply to most Binary Options companies.
Thousands of Britons are thought to have been defrauded of hundreds of millions of pounds. The Bureau talked to many of the victims after a whistleblower approached us with internal files from some of the companies showing how they targeted and defrauded those individuals.
Some customers lost their life savings and others committed suicide when they realised the extent of their losses. The National Fraud Intelligence Bureau told us it was the biggest fraud in Britain.
Many of the Israeli based operators are now moving to Cyprus which has minimal regulation but confers the respectability of a European Union base.
