Banc de Binary have ceased all operations. Please visit our recommended brokers page.
|Broker reviews||Blacklist rating||Trade now||Early expiry||Avg returns||Min deposits||Min trade||Ratings||Trade now|
|Visit Site||95%||$250||$1||Visit Site|
|Visit Site||80%||$10||$0.10||Visit Site|
|Visit Site||160% - 180%||$50||$2||Visit Site|
|Visit Site||95%||$250||$1||Visit Site|
|Visit Site||90%||$250||$1||Visit Site|
|Visit Site||80% - 90%||$250||$5||Visit Site|
The Commodities Futures Trading Commission and Securities and Exchange Commission (CFTC and SEC respectively) have both filed lawsuits against Banc De Binary, an offshore binary options broker which offered its services to US customers as well as customers around the globe. Banc De Binary has a strong reputation worldwide, but was not registered with the CFTC. Lately the CFTC has been cracking down on binary options brokers. In November, the regulatory agency took action against a company called Intratrade, which has ceased all business activity since March.
What was the CFTC’s complaint concerning Banc De Binary? According to the allegation, the problem involved Banc De Binary offering customers in the USA options contracts on currencies, stock indices, and commodities. While many binary options brokers offer USA customers the choice to trade stocks and stock indices, most steer entirely clear of allowing USA customers to trade futures or commodities. Why? It has to do with this stipulation in the CFTC’s legal codes for trading in America:
“It is against the law to solicit U.S. persons to buy and sell commodity options, even if they are called ‘prediction’ contracts, unless they are listed for trading and traded on a CFTC-registered exchange or unless legally exempt.”
If this sounds confusing, you are not alone in not understanding it. Many brokers find it so confusing that they completely refuse to accept customers from the USA so as not to become embroiled in some kind of legal dispute like the one which Banc De Binary is facing right now.
Find a binary options broker that accepts USA Traders here
The most logical way to read the statement above seems to be as follows: It is illegal for an offshore broker to offer USA customers the choice to buy or sell commodity contracts unless the broker is registered with the CFTC. “Commodity contracts” would seem to include currencies and commodities, though it appears now that it includes stock indices as well. As of this point it is still unclear whether or not stocks themselves are considered to be part of “commodity contracts” by the CFTC. Regardless, Banc De Binary was not registered with the CFTC—just as the vast majority of binary options brokers are not.
Speaking on the lawsuit, CFTC Enforcement Director David Meister said, “If a company wants to offer U.S. persons the opportunity to buy and sell predictions on the direction of commodity prices, the company must play by the rules or suffer the consequences.” The CFTC is demanding fines as well as an injunction against the broker so that Banc De Binary will be unable to offer its services to USA customers in the future.
According to Banc De Binary, the broker’s offices are located in the United States, and the company is registered as a private bank, operating under applicable US laws. No further comment was offered by either the CFTC or Banc De Binary concerning this private bank status. Banc De Binary has yet to release further comment on the entire matter, so at this point, traders are still awaiting clarifications regarding the status of company in the USA.
Should you avoid trading with Banc De Binary, in light of recent events? At this point issues are far too confused to clearly determine what has happened. If you are located in the USA, you will need to move your account to another broker. If you are located in another country, this news should not directly affect your account, though it may call your trust into question. It is worth pointing out however that the CFTC has become somewhat paranoid about retail trading activity over the past few years, and has gone after numerous brokers, both Forex and binary options brokers.
According to a recent investor alert by the SEC, the growth of binary options trading online has been accompanied by a surge in consumer-submitted fraud complaints. This is not surprising in light of the fact that many binary options brokers are not legitimate. “Investors should be aware of the potential for fraud in this area as well as of the reality that they can lose their entire investment,” stated Lori Schock, head of the SEC’s Office of Investor Education and Advocacy.
There is indeed potential for fraud in this area, but that does not make Banc De Binary a company that would steal your money. While they do appear to have made a mistake in dealing with regulations in the USA, this does not necessarily mean they are ultimately untrustworthy to patrons elsewhere in the world. We recommend that you stay tuned for more news and updates pertaining to these events before you decide to take your business elsewhere. These regulations are quite complex, as are the many forces motivating the CFTC and SEC to take action against brokers like Banc De Binary.
Banc De Binary has many positive reviews online, (Check out OUR review) has uploaded numerous resources and trading tools for customers, and offers a demo account so that new traders have a chance to test their strategies without losing money. They appear to offer a much better product than the vast majority of their competitors, and have far more personal customer service. We will let you know as soon as they release a statement about the CFTC/SEC lawsuit or more information comes to light from the CFTC or another source.