Banc De Binary Shuts Down Operations Over Regulatory Pressures
Banc De Binary, a major online trading firm dealing with binary options recently announced that it is winding up operations. The Cyprus-registered but Israeli owned company has cited regulatory pressures for its closure. The company allows investors to bet on short-term price shifts in financial assets through binary options.
In a statement Banc De Binary, said
Banc De Binary will be gradually downsizing its operations due to regulatory constraints. For clients that have eligible funds in their account, we are encouraging them to withdraw the remaining balance
The company has had to pay $11 million as penalties in the United States with respect to charges filed against it for illegally enabling U.S. residents to invest on its site. Banc De Binary is not the only company to have been put under the scanner. Reportedly over 100 such firms are operating from Israel and the entire industry has come under scrutiny.
Shmuel Hauser, chairman of the country’s regulatory body, Israeli Securities Authority (ISA) recently stated that he was working with regulators from Britain, U.S., France and Belgium to examine charges that Israeli companies were illegally selling risky financial products to international customers.
A Reuters report released in September 2016 revealed the full extent of their operations and also highlighted allegations made by several investors through their lawyers of being duped by the firms. Among other things, the customers accuse the firms of transferring money between accounts without approval and preventing them from withdrawing funds from their accounts.
Last week the ISA took formal action for the first time against a binary options firm by sending a warning letter to Fairtrade, a binary options peer to peer (P2P) exchange for operating an unauthorized exchange. The binary options industry has been grown rapidly in the key markets of China, United States, Japan and Europe. According to two Israeli firms specializing in trading platforms, they work with online brokerage firms who handle combined trades worth $8 billion per year.
Operating through smartphone apps, the companies have been able to attract a wide swath of investors who are not professional traders which increases the risk attached to such transactions.
Regulatory body Hauser has banned firms from selling binary products within Israel and has requested the country’s attorney general to amend existing laws to ban companies from selling overseas as well. A draft legislation for the same is said to be in the works and is likely to be ready within a few weeks’ time.
UK’s Economic Secretary Simon Kirby has reiterated the government’s commitment to crack down on money laundering practices in the aftermath of
American government officials and European business heads have highlighted concerns that doing business in China has become increasingly difficult in
A report from a UK body known as Civitas has stated that businesses in the country would need governmental assistance