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Increased binary options scam in Belgium pushes FSMA to warn

Maya Mandz | Jul. 12, 2019
Increased binary options scam in Belgium pushes FSMA to warn

July 12, 2019 | AtoZ Markets - Belgium Financial Services Markets Authority (FSMA) has recently issued another warning against brokerage companies, which were offering binary options despite a permanent ban on these trading tools since August 2016. 

Increased binary options scam raises FSMA concerns

The FSMA reports, that several fraudulent firms keep soliciting local investors in the face of the prohibition on offering of binary options. 

In the official statement, the Belgian financial regulator warns the public, that “any company wishing to offer investment products must hold an authorization”.

Against the background of globally increased binary options scam, the Belgian authority reminds investors about these enterprises’ ban in the country, which came into force on August 18, 2016. 

According to the ban no investment firm (authorized or not) is permitted to distribute binary options within the territory of the country. 

As per the regulator’s report, the firms that are the subject of the latest warning do not comply with the aforementioned rules. 

The authority added, that consumers who have invested in these companies have never recovered their funds. 

Thus, as FSMA noted, “ such activities most likely constitute a case of investment fraud.” The regulator strongly advises against responding to any offers of financial services made by the following brokerage companies:

  • Go Capital FX (Go Capital 123 – Lancelot Equity Ltd.) (gocapitalfx.com, or gocapital123.com);
  • Vipwayzone (vipwayzone.com).

ESMA: binary options ban in all EU is possible

It is worth to mention, that financial experts admit, that binary options might become an outlaw in the entire European region very soon.

The pan-European regulator ESMA has made the first steps toward this reform when introduced product intervention measures in August 2018.

The new measures included temporary restrictions on the binary options industry and new leverage restrictions on CFD’s.

Since then, ESMA had kept renewing the product intervention measures every three months until the national European regulators proposed to ban binary options and restrict CFD’s in the EU regions permanently.

The pan-EU authority has already approved proposals on permanent binary options prohibition taken by national regulators from Austria, Estonia, Slovak, Czech Republic, UK, Holland, Denmark, and Germany, Poland and Luxemburg.  

The retail community went further and suggested that following its pan-European regulatory colleague, the Australian financial regulator ASIC might restrict most popular products for retail investors- CFD’s and ban binary. 

Russia to set standards for the local brokers

Against the background of the changes in the retail industry in Europe, the Forex brokers in Russia have been asked to do more to demonstrate acceptable advertising practices in the country. 

The message was delivered by an official of Russia’s Federal Anti-Monopoly Service’s (FAS) Tatyana Nikitina, who said that brokers' setting standards will be better than increasing fines.

Nikitina stated, that there are occasional violations of the law when it comes to Forex brokers advertising their services.

The head of FAS believes, that brokers could collaborate with advertisers to create a set of best practices in the industry.

Nikitina mentioned the Forex Dealers Association, a self-regulatory body for Russian brokers, which could provide advertisers with a number of examples of advertising so that they know what is acceptable and what is not.

She added that not all foreign exchange trading advertisements are illegal. Such entities as educational services and books that provide information on currency markets trading as examples of this.

It is worth to mention, that in December 2018, the Central Bank of Russia, due to repeated violations during the year, revoked the licenses of the five largest Russian Forex dealers - Forex Club, Fix Trade, Trustforex, Alpari Forex, and Teletrade Group.

It seems, that Forex Licencing struggles with Central Bank of Russia and the local authorities overall. According to the financial analyst Timur Nigmatullin, the tightening of the rules on the Forex market is just a matter of time. 

Think we missed something? Let us know in the comments section below.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.