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Screenshot of a breaking news alert e-mail from Q2 2017
Banc de Binary, one of a handful of CySEC-regulated binary options brokers, has been charged with taking US clients.
LeapRate Exclusive…. Assuming the charges stick, it will be interesting to see if the EU regulators involved — Cyprus’ CySEC and the UK’s FCA — cooperate with the CFTC in the US, and enforce whatever penalties are assessed by US authorities….
The CFTC has filed a civil complaint in Nevada court charging Banc de Binary that it:
- held itself out as being headquartered on Wall Street — it is based in Cyprus, and is regulated by CySEC, although on its website it lists its European Headquarters as 1 King Street in London
- offered binary option trading to U.S. customers, and
- accepted and executed orders from U.S. customers.
All three above are major no-nos as far as the CFTC goes and therefore the CFTC also charged Banc de Binary with operating as an unregistered Futures Commission Merchant (FCM).
Banc de Binary is one only two binary options brokers to have received CySEC licensing. We earlier reported that CySEC created a special requirement for binary options brokers to register and be licensed, after several years of such brokers operating ‘under the radar’.
The CFTC specified that from May 2011 through March 2013, Banc de Binary allowed U.S. customers to trade options products (i.e. binary options) prohibited by the CFTC’s ban on off-exchange options trading. The complaint alleges that Banc de Binary did not limit its options offerings to ‘eligible contract participants’, allowing U.S. customers to trade without requiring any information about their trading history or net worth.
The CFTC is seeking civil monetary penalties, an injunction preventing Banc de Binary from engaging in certain commodity options activity with U.S. customers, and other remedial ancillary relief, including restitution, disgorgement, and rescission — likely meaning it wants a large fine assessed against Banc de Binary, as well as the return of any profits made from U.S. customers.
The CFTC acknowledged that European regulators — specifically the UK’s newly named FCA, and Cyprus’ CySEC — assisted in the investigation.
For the complete CFTC press release click here.