FBI warns investors about binary options scams

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These trades often do not comply with U. In fact, the increase in the number of these platforms has led to an increase in binary-option related fraud complaints to the CFTC.

Complaints include scams in which binary options trading firms claim they deposited money in an investor's account but did not. They might deny requests to return funds or even require hidden fees to return assets. Many online binary options trading platforms overstate the average return on investment or even manipulate past charts to make investing appear more promising than it really is.

Some binary options trading platforms may offer a bonus for opening or adding to an account. The bonus is a monetary amount added to the deposit under the condition that the investor subsequently makes a specific minimum amount of trades before withdrawing any funds. The payoff to a winning investment is a fixed monetary amount or an announced percentage of the initial investment.

A losing outcome generally results in the total loss of the investment. Binary options are legal and available to trade in the U. Here is a list of DCMs. This is only a small portion of the binary options market, though. There are currently only three DCMs offering binary options in the U. Many offshore companies engaged in commodity investor complaints relating to fraudulent binary options trading platforms options transactions are not registered with the CFTC, however, and investor complaints relating to fraudulent binary options trading platforms is best to avoid them entirely.

When companies operate offshore, investors have even fewer protections and are at greater risk of being targeted for fraud. Those featured on the RED Best online trading canada 2015for example, are companies operating without CFTC registration and are based offshore where they are not held up to the same standards as those based in the U.

To further complicate matters, market experts have seen a rise in the software platforms that tend to target over-the-counter binary options that are not CFTC-regulated. These require only a counterpart of the trade who is a broker or an option contract. An investor must be cautious when entering the binary options market and keep in mind the risk of fraud, manipulation, and abuse. Investing can be risky. Make sure your financial professional is properly registered and check their disciplinary history.

If you are suspicious of your broker firm, ask them: In which country are they based, and do they have a U. Is it legal for them investor complaints relating to fraudulent binary options trading platforms solicit customers in the United States? Are their customer funds held in segregated accounts in a major U.

Can you withdraw your funds at any time? Do they ever profit because a customer on the other side lost? To more easily avoid scams and false promises, you should work with a CFTC-regulated exchange within the U.

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Before you trade binaries anywhere you need to be aware of this fraud alert put out by the CFTC. There currently are only three designated contract markets offering binary options in the U. All other entities offering binary options that are commodity options transactions are doing so illegally.

Many have thought we where nay sayers or just Nadex promoters. But now the CFTC is putting out the same alerts to watch out for binary bucketshops. Some binary options are listed on registered exchanges or traded on a designated contract market that are subject to oversight by United States regulators such as the CFTC or SEC, respectively, but this is only a portion of the binary options market.

It is illegal for entities to solicit, accept offers, offer to or enter into commodity options transactions for example, foreign currencies, metals such as gold and silver, and agricultural products such as wheat or corn with U. All other entities that are offering binary options that are commodity options transactions are doing so illegally. Check to see if the binary options trading platform is a designated contract market.

Further entities that solicit or accept orders for commodity options transactions and accept, among other things, money to margin, guarantee, or secure the commodity options transactions must register as a Futures Commission Merchant.

In addition, individual investors may not be able to pursue, on their own, some remedies that are available for unregistered offerings. In fact, some binary options Internet-based trading platforms may overstate the average return on investment by advertising a higher average return on investment than a customer should expect given the payout structure.

In other words, in the example above, an investor could expect, on average, to lose money. The CFTC and SEC have received numerous complaints of fraud associated with websites that offer an opportunity to buy or trade binary options through Internet-based trading platforms.

The complaints fall into at least three categories: The first category of alleged fraud involves the refusal of certain Internet-based binary options trading platforms to credit customer accounts or reimburse funds after accepting customer money. The second category of alleged fraud involves identity theft. The third category of alleged fraud involves the manipulation of the binary options trading software to generate losing trades. These complaints allege that the Internet-based binary options trading platforms manipulate the trading software to distort binary options prices and payouts.

Many excerpts taken directly from: Retail Click the link to open a nadex account. Or signup on our free member site using the link by clicking here. CFTC warns traders about fraudulent schemes involving binary options and their trading platforms.

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