The state of the binary options market after the ban ESMA

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Binary options fraud finally banned

. and leading Binary Options trader indicted

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Published March 28 2020

The Bureau co-publishes its stories with major media outlets around the world so they reach as many people as possible.

The EU today banned binary options fraudsters from targeting individuals in Europe. This comes just days after Lee Elbaz, a woman whom the Bureau accused of being a leading figure in the scam, was indicted for fraud in Maryland USA. The binary options “boiler room” operations are thought to have cost people in dozens of countries many billions of dollars over the last few years.

The fraud involves phoning potential clients and pressuring them to “invest” in binary options, which are effectively bets on whether the price of a product, such as oil, or a share price will go up or down in value. The target can access their account online and can see that they appear to be doing very well. They are persuaded to put in more and more money as their virtual account keeps climbing in value but when they try to take it out most of the binary option companies refuse to pay out.

Some of the people to whom the Bureau talked had lost their life savings, sometimes amounting to hundreds of thousands of pounds. Others are reported to have committed suicide when they realised they would never get their money back.

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Some binary options companies sponsored Premiership football clubs to promote the names of their companies and manipulated newspapers into running puff pieces promoting their operations to the readers. They cleverly used social media – with thousands of fake followers – to give the impression that there was an army of investors who had got rich quick by investing in Binary Options.

In 2020 a whistleblower came to the Bureau and revealed the criminal way in which some companies – mainly based in Israel at the time – operate. When they are targeting British clients they use fake British phone numbers and City of London addresses and claim to be properly regulated. Our whistleblower provided the Bureau with lists of hundreds of British victims who confirmed that they had been defrauded, as well as others from all over the world, and we ran a series of articles detailing malpractice by Binary Options traders.

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Many European countries took prompt action to clamp down but Britain did nothing. The police told the Bureau that it was the biggest fraud hitting individual British people but they did not have the powers to deal with it because the fraudsters were based abroad. The UK only took action in January 2020 when it made the Financial Conduct Authority responsible for binary options regulation.

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On March 27 2020 the European Securities and Markets Authority (ESMA) barred binary options companies from selling to individuals and the UK’s Financial Conduct Authority said it “supports ESMA’s application of EU-wide temporary product intervention measures”.

In November 2020 the Bureau named Lee Elbaz, Yukom, Binary Book and Big Option as key players. The companies threatened legal action to try to prevent the Bureau publishing but did not, in the event, sue after publication. Last year Lee Elbaz made the mistake of making a stopover in the USA and was arrested. On March 22 2020 Elbaz was indicted with Yukom, Binary Book and Big Option named in the indictment.

The indictment states that Lee Elbaz AKA “Lena Green” was Chief Executive Officer of Yukom, which provided services for Big Option and Binary Book and that she described herself as Trading Floor Manager for those two companies. It alleges that between about May 2020 and June 2020 Elbaz knowingly conspired with others “to defraud binary options investors. by means of materially false and fraudulent pretences”.

About The Author

Meirion Jones

Meirion is an award-winning journalist best known for investigations into Jimmy Savile, Trafigura, vulture funds and the ‘fake sheikh’.

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The state of the binary options market after the ban ESMA

The European Securities Markets Authority (ESMA) announced it is renewing the restrictions on CFDs trading for another three months as of February 1, 2020. The pan-European regulator also implied that it will monitor closely forex brokerages, as it has identified certain malpractices.

Ever since August last year, when these measures have been officially applied, CFD providers have been searching for ways to get around them, and more specifically the leverage cap to 1:30 for retail clients. Some of them are advertising to such clients the possibility of becoming professional clients upon request and thus becoming eligible to use higher leverage ratios. Another tactic forex broker use is moving their customers’ accounts to an intra-group third-country entity.

ESMA stated it is aware of those malpractices and will monitor closely CFD providers. The regulator also implied it is possible to introduce “other Union measures” it deems appropriate.

Re: ESMA bans binary options, sets restrictions on CFDs for retail clients

The European Securities Markets Authority (ESMA) announced it is renewing the restrictions on CFDs trading for another three months as of February 1, 2020. The pan-European regulator also implied that it will monitor closely forex brokerages, as it has identified certain malpractices.

Ever since August last year, when these measures have been officially applied, CFD providers have been searching for ways to get around them, and more specifically the leverage cap to 1:30 for retail clients. Some of them are advertising to such clients the possibility of becoming professional clients upon request and thus becoming eligible to use higher leverage ratios. Another tactic forex broker use is moving their customers’ accounts to an intra-group third-country entity.

ESMA stated it is aware of those malpractices and will monitor closely CFD providers. The regulator also implied it is possible to introduce “other Union measures” it deems appropriate.

Market News

The European Securities and Markets Authority (ESMA) announced on Monday that it extends the restrictions imposed on binary options for another three-month period. More specifically, ESMA renews the prohibition on the marketing, distribution or sale of binary options to retail investors as of today, October 2, 2020.

The renewal of the restrictions imposed on binary options does not come as a surprise, as ESMA announced its intentions to extend it a further three-month period in August. Back then, the regulator also announced some changes to the renewal, excluding certain long-term options from the scope of the prohibition.

Previous week ESMA has also agreed to extend the restrictions imposed on the sale, distribution, and marketing of contracts for differences (CFDs) until the end of January 2020. The regulator has not changed any of the provisions which it initially announced in March this year. These include a leverage cap of 1:30 for forex majors, provision of negative balance protection on a per account basis, preventing the use of incentives such as bonuses by brokers and a requirement for the latter to state how many of their clients lose money with them.

We remind you that the pan-European regulator introduced the ban on binary options and the restrictions on CFDs in July, 2020 due to investor protection concerns. According to the Markets in Financial Instruments Regulation (MiFIR), ESMA can only introduce temporary three-month measures, but before the period expires, the regulator can review the results and consider a further extension for another three month-period.

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  • Binomo
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