16 March, AtoZForex, Lagos – In the United States, Binary options trading is a well regulated dealing, such that to be lawfully offered, it must be traded on a registered board of trade. Many firms fail to appropriately register their binary options dealing operations, which often prompts a public warning from the Commodity Futures Trading Commission (CFTC) against dealing with such firms.
CFTC allegations against Vault Options and GT 365
The CFTC has now announced a civil complaint filed against two Israeli web-based binary options firms, Vault Options, Ltd. (Vault) and Global Trader 365 (GT 365). According to allegations against these firms, the CFTC’s complaint claims that “the two firms unlawfully solicited and accepted more than $1 million from at least 50 U.S. customers to trade off-exchange binary options contracts, defrauded those customers, and operated as unregistered Futures Commission Merchants (FCMs).”
Vault and GT 365 have been discovered to have been operating their websites since at least October 2012, till date. Their business involves operating a platform through which U.S. customers can buy and sell binary options on various commodities, foreign currency pairs, and stock indexes. The major issue against the firms is the fact that in the United States, binary options must be traded on a registered board of trade, which they failed to do. Hence, Vault and GT 365 did not execute transactions on a registered board of trade and neither Vault nor GT 365 has ever been registered with the CFTC in any of such capacity.
See also: CFTC bans FX firms Haeres Capital and Sharpe Signa
Defrauding customers
Additionally, the CFTC found that Vault and GT 365 solicited over $1 million from a minimum of 50 U.S. customers, with allegations that these firms:
“defrauded their customers by, among other things, misrepresenting and omitting the likelihood of profit and loss that customer make trading binary options, falsely claiming that customer funds were insured against losses, fraudulently inducing customers to send them more money before initial funds could be returned, and misappropriating customer funds.”
While Vault and GT 365 claimed on their websites that large profits were being made by customers of their firms, the fact is that many customers incurred heavy losses nearly all of their funds sometimes within days or a few weeks. These discoveries have prompted the CFTC’s court filling against Vault and GT 365.
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