Binary Options Regulated and Scam Brokers

[hoover]

That's what a countries over paid politicians who run a countries legal systems are for. By that I mean, doing whatever helps them keep their jobs. They helped make the laws for the FCA and the FOS, they can help get them adjusted to. Laws are not put in place to make crooks money. Not all laws...... I hope

 

[Joa]

Look... this is the loop hole for all crooks:

Regulatory Authorities only regulate legitimate companies. They are NOT law enforcement when it comes to fraud perpetrated by criminals.

Now to understand, the story goes this way:

Party A (the crooks) establishes a company which is now Party B say in Israel, or on Mauritius, the Seychelles or any other shady place.
Party B then goes about registering a company now Party C, in another funky location, say Cyprus, and applies for a license. In most cases this is rubber stamped, granted, and woops it's all of a sudden a legit company!! Now party C claims to be regulated - and it's no lie !!! - and "registered" all over Europe, and even that is the truthful fact but as we know, it means absolutely nothing. Registered and REGULATED are simply not the same status.

You have now a few parties involved, something is still missing: The web page!! So now some webpage and a web name gets created and this domain is now owned by any of the parties - or by a totally different one, one that nobody ever heard of, and often now THIS website is owned by some company on Anguilla........ and the corporate name is either totally different or similar to what we know already from Party A, B and C......, you got now Party D involved.

We're not done yet: Now Party A goes about and creates a clone of Party B, and sometimes one of Party C, too. And in all fraud cases, there will be an exact 100% clone of the Website as well. Someone has to cash the money right? The draft of first website was defunct anyway and the clone gets now activated. The sites are identical, just the links are different and you woulnd't know anyway.

You click to pay by credit card - and all information NOW goes to... wherever, most likely to party D with a bank account say in Gibraltar or in Dubai. THAT bank account again belongs to another company of the Party A and you're not wiser. Since you're such a nice new victim, they offer you a BONUS - virtual money of course. This means they just confess that they actually robbed you of your money and replace it with virtual cash. There is no such thing as a bonus in reality.

Once you've discovered that you can't withdraw your own money it, it's too late and the games begin. You can't withdraw anything because you accepted the bonus, and of course you can't withdraw virtual money.... of course you can't, your money is gone already!!!

If you got the nerve, you complain to the CySec... they may even investigate the case at one point. There is no trace of any of your payments to be found at the "licensed entity" there. What do you think the CySec tells you? We're sorry.......

So to avoid all that, you must check BEFORE YOU MAKE ANY PAYMENT:

Who is your legal counterpart? The name please, the corporate address, the phone number at that address, the license number, too - and then you go further and
A) ask the "broker" or "account manager" for the bank account information, full details meaning name of account holder, account number, bank name, bank address.
B) Avoid Credit Card payments in the first place because you'll never know WHERE your money goes and when you get your credit card statement, it's TOO LATE
C) If the contractual partner (for your account), the Website owner, the Website name, and the Bank account holder do not match, WALK AWAY!!!!!!!!!!
D) If phone numbers given are not in the same jurisdiction as the corporate seat of the regulated entity - WALK AWAY!!!!

Have you ever thought about a few things: Why does not one honest, seriously regulated (non-cypriot), and big broker company ever advertise here?
Why are we seeing only banners of shady entities, located in all the wrong places, including Cyprus?

Makes you think, doesn't it?

Long Live The Clones!!!!!!!!!!!!!!

 

[Beni31]

It's true... There's a lot of scams in the binary options industry (I've made the experience myself) and unfortunately it was before reading this post. However, I'm now more careful and I can say that I have a good broker. But you know how it is, some people have bad experiences and classify a broker as scam while others have had a better experience with the same broker. My point is that, there's not that much difference between scam and honest binary options brokers, because some scam brokers do a good job of hiding their game. What I find more important when choosing a broker is to study all the details of the terms and conditions, try to reach people (i mean true people, not fake profiles) who are actually trading with this broker on forums and ask them questions, etc. Contacting the support team of any broker is a must BEFORE OPENING AND FUNDING your trading account in order to know all the necessary documents that you must provides and get all the information needed about withdrawals. Finally, you should know how a broker works from start to finish (deposit to withdrawal) before trading with them. Be careful people!

 

[Amin EL-HAKIM]

Dear Joa
First let me congratulate you for this thread. Although most of us know what you're talking about, I hope that what you have posted will be an eye opener for many newbies getting into trading. However, let me remind you that even with regulation (whatever the regulation authority is), the broker can still do whatever they like. The only way to get your money back with regulation is to hire a lawyer and pay a handsome fee, however, without regulation, your money is definitely gone with no return and you don't know to whom it went. This is a fact I have learned after 11 years in forex. We have in the forums right now some cases concerning brokers regulated by the NFA who cancelled profitable trades just because they didn't like them and "case closed". I personally can tell you about a brokers who's regulated by Cysec, and still operational, and I personally visited their offices in Cyprus and met the owner and managers, and this broker is now delaying withdrawals and had recently a trend of numerous cases here on the FPA. Best advice is, don't deposit money you can't afford to loose.

 

[Joa]

Amin
Thanks for a compliment.
.. I agree with you 100%. I am in the business for decades, times when you had to draw the charts manually....
I wrote the last post based on a lot of research and I just hope, some people read it and get really careful and cautious.
I try my best to prevent the crime - crying foul AFTER the money is gone is like running in circles, because you indeed don't know whom you have to deal with.

I never said that regulation is preventing it. Regulation only limits the numbers of brokers. and by the way: CySec is not a regulatory authority that deserves the name and I have made that point clear over and over again, it's in itself a bucket shop regulating bucket shops.... Do NOT engage with companies registered there or in any other shady location. I can't repeat that often enough and as you state, I am talking based on experience. I got my connections on Cyprus..

If I can take down this or that "broker", one way or another, I'm doing it. Remember Crown Forex.

 

[Joa]

Pharao..

You and I have the same issues over and over again, I copy and paste here from another thread (slightly expanded in places) because it's something that is valid in general. Some things are your opinion, some are mine.... and then are facts that neither one of us will ever change.

You are again talking about the infamous "Liquidity Providers" that forex brokers are connected to and Binary Option brokers aren't - as if you didn't know any better. That comes across like you are absolutely defending the Forex Brokers, and bash all Binary Brokers.

If you had done a little homework, you'd already know that there are indeed honest Binary Brokers, regulated by authorities that are not to be messed around with. I do not want to go into advertising here but I agree with SCAMBUSTERZ in parts to a very high degree.

Again, for all to hear it and made aware of: more than 90% of all Forex transactions NEVER REACH THE MARKET because they are booked on B-Books of the broker and that means, there is NO LIQUIDITY PROVIDER directly linked to anything anyway. It's brokers matching clients transactions of long and short positions. If ever necessary, the broker covers his rear end on the net exposure. Say there are 1000 clients trading long, and 990 going short, and the order volume on one side exceeds the volume of the other, then he MAY cover that position at the liquidity providers, and only do so if he can't cover the risk from the profits he just skimmed of the losers and from spread. So all traders profits come from what exactly? right!!!! from those who are losing. Not enough: The broker who never placed the orders in the market, charges rollover, AND the spread. Fair? You make up your mind yourself. How can you charge "rollover" when all they did was booking your position and therefore making it virtually virtual? So they are asking interest for something that never was placed in the market. TRUE interest on a virtual position!?!? They charge SPREAD, never place the order in the market, for a virtual position again. Fair? Go figure. And mind you: Even for regulated entities it's perfectly legal to run the books this way!!

Don't believe me? Then go on your MT4 Platform... check the feature "multiple close by"..... how do you think it's possible for YOU to match your longs and shorts yourself??????? Right... With that, you just eliminate (match) your own positions on your broker's B-Book.

Pharao, I do invite you to state CORRECT information about this whole B-Book and +Liquidity Provider+ issue. Don't trust just my word - even when I KNOW I am RIGHT, go get some first hand information from an honest broker.

Binary Options are here and they will stay here. All we should be worrying about is to find serious brokers, properly regulated by the correct authorities, and who have their corporate seat in the right jurisdiction. Israel and Cyprus, and places worse than that, do not qualify. Those locations are a general NONO, and it doesn't matter who it is, it applies to forex, too. Stick with brokers who are LOCATED AND REGULATED in the UK, the US, Switzerland, Germany... and so on, and stay away from any and all the others.

Pharao, please do NOT claim that an honest Binary Broker doesn't have a liquidity provider if you can't back up your statements. It might be a multi billion dollar entity being the market maker and they'd disclose that to you. Ever talked to just ONE of the regulated Binary Brokers, just one? Ever heard first hand from one about HOW they are doing it? Ever heard from a forex broker a confession about their B-Books?? Yes you may have heard "We are an ECN and STP" but they denied having A- and B-Books. Bloody lies from A to Z, that's what... ...
and Pharao, you keep coming back with your forex "liquidity provider" connection as if it was the holy grail of forex or the law that Forex Brokers had to obey. It's all a lot of Horse Manure. B-Books are NOT connected to ANY liquidity provider. Period. And I KNOW you know it!!!!!!!!

Your statements about brokers and their liquidty providers are misleading and to a degree patently false, when it comes to more than 90% of all transactions conducted by private traders. Equally misleading is your statement, that no Binary Broker (regulated!!!) has a liquidity provider. Your statement here is therefore false, too. I do invite you to contact a regulated entity in Binary Options and get first hand information. Your statement about transactions and/or brokers not being connected to the Liquidity providers are only true for bucket shops. But then it's true for EVERY bucket shop. Forex or Binary!!

For those who are too lazy to run a little due diligence on their won, and then deal with bucket shops it's like playing with dirt: You play with dirt, you get dirty.

For heavens sake, tell the members the truth here!!!! Small traders are ALL being taken to the cleaners sooner or later. And everybody dealing with the buckets shops one way or another has lost his money when he sent it out.

I give my best to warn the members. I do my research on my dime and time, I voice my opinion and findings. Remember the story of Crown Forex? Who do you think was the driving force behind that??? It wasn't the first action of mine, and it wasn't the last one either. Back then, I never got even a thank you for my relentless efforts to protect the small guys money.

I do take brokers off the net or off the market if given the chance. I am NOT politely asking the crooks to come here to justify their criminal acts.

I could go about arguing with you about conflict of interest, too... be that about banners on this site, about outright scandalous "performance tests".... really funky signal providers ------- and on and on....

I make ONE point clear though: I am not the one who gets paid here by the FPA. I have no part in the big commercial section of the FPA. I do have no conflict of interest whatsoever. I strive for the truth and I am not very diplomatic and polite, I admit to that.
I am NOT getting paid at all. Not in cash, not in kind, not by commission, and not by royalty, not by kickbacks.

I DONATE my time and efforts to the members.

 

[skaistera]

well guys im worst there, i just start to trade binary options with band de binary, and you know what is worst, they took my 2000£ with out my permission at all, and as i contact customer service they told me you still need to sign document of transaction, and after my ''account manager'' told me, first make for me 2000£ and after i will give you money back, and you know what, im near to loose all my money ;(

 

[Joa]

well guys im worst there, i just start to trade binary options with band de binary, and you know what is worst, they took my 2000£ with out my permission at all, and as i contact customer service they told me you still need to sign document of transaction, and after my ''account manager'' told me, first make for me 2000£ and after i will give you money back, and you know what, im near to loose all my money ;(

You need to start your own thread about this.
This thread is not suited for that

 

[Pharaoh]

Joa, if you really want to keep dragging your own thread off topic by trying to convince people that all forex brokers are B booking and your favorite binary brokers aren't, fine.

You weren't the only one condemning Crown Forex when it went bad. Just because one well respected forex broker ended up being a scam doesn't make all forex brokers scams. Just because one binary broker doesn't cheat doesn't absolve other binary brokers of their misdeeds.

If you had done some research of your own, you will find a thread where Roaming and I covered much the the same ground - and where he finally had to admit that there was no such thing as a binary LP. In that thread, you will see that there are a tiny handful of well regulated binary brokers - which are still bucketshops, but are under close regulatory scrutiny, which greatly reduces the chances of them doing anything dishonest.

Then there's this very interesting post:

I can't tell you who I'm quoting. I can say that my source has been involved in upper management of both retail forex and binary options brokers. Confidential sources who are willing to divulge information about how brokers really work are hard to get.

According to my source...

"Regarding LP's for binary, there is NO such thing.
There was an attempt to do it in a company called NADEX. It didn't work at all.
No one bought it."

Unless my source is in error or something has changed, there are no liquidity providers for binary options.

I challenged OptionRally to explain how they made money. Their rep couldn't answer. I explained how his company operates like a bucketshop and he had no reply. If you or anyone else can show me how a binary broker can connect to an LP or otherwise hedge itself, I'll happily correct my statement about the impossibility of binary LPs.

Maybe you need to check what the UK FCA has to say about binary options to put this in perspective:

We don't regulate firms that offer binary bets. These involve you betting on the likelihood of, for example, an index reaching a certain level during a specified period. You pay an initial premium when entering into the binary bet and receive a return if, for example, the relevant index reaches the certain level during the specified period. If the relevant index does not reach the certain level during the specified period, then you don't get any return and lose the initial money paid.

The profit or loss relating to a binary bet is fixed when it is taken out rather than, for example, varying with movements in the chosen index (as is the case with a spread bet, being a contract for differences).

Firms based in the UK that offer binary options are regulated by the Gambling Commission,...

How can any LP offer a fixed amount of profit for a price movement as little as 1 pip in the money? How can it only collect a fixed amount of the price goes the other way by hundreds of pips? Simple answer - it can't.

Since you seem to love some these binary brokers so much, why don't you ask one to explain how anywhere from 1 pip to thousands of pips can result in the same payment to/from from their alleged LP? Ask them to name their LP. Personally, I don't trust any forex broker that doesn't proudly list their LP(s). I can't seem to recall any binary broker ever doing this.

Binary options are run like online casinos - all trades are in house. Like online casinos, a few are honest, but the vast majority aren't.

Yes, some forex brokers run A and B books. I believe I covered that in my last post (but didn't use the A vs B designation) where I pointed out that a clever forex broker would keep the losing clients in house and either hedge real client trades or pass them directly up to their LPs. And, there are plenty of forex market-makers, aka pure B book, aka pure bucketshop brokers. Only a scam broker would claim to be ECN because of the electronic connection to the client. Any broker with a shred of honesty claiming to be ECN is passing trades to its LP(s).

One true difference between forex brokers and binary brokers is that it's possible for a forex broker to be true ECN and not have a conflict of interest when traders win. Virtually all the money used by a binary broker to pay winnings, salaries, and to keep the lights on comes from losses of other traders - so, just like casinos and forex bucketshops, they need many more people to lose than to win or else they go out of business - unless they cheat the winners.

 

[Joa]

Allow me to disagree

These issues here are NOT off topic. They belong into the category of education so the member can actually get a grip of what's really going on in the "Market". By telling them HOW they are going to be taken to the cleaners gives them a shot at making an educated decision.

To read that you ever considered "Crown Forex" a well respected broker gone sour, makes me speachless. This was a criminal entity from the word GO. Did YOU actively pursue the case of Crown Forex? I did. I was instrumental in having them taken off the market. This is the only HONEST way. A crook needs to be taken care of. Silky glove business is not my style. I can do so because I have no conflict of interest. I am not getting paid by crooks and bucket shops. So I can pursue cases in the appropriate manner and without paying attention to my wallet.

I never stated anything about "favorite" Binary Brokers not doing B-Books. ... and I did state that ALL Forex Brokers do. That's a fact. Anything else is fantasy and misleading. You circle around the issue. Any MT4 platform allows you to do a "multiple close by" - proof that your transaction has NEVER hit the market. It is YOU at that moment who does matching of positions. If you don't understand this, then I am happy to explain it to you again.

Each and every forex broker, scam or not, who provides clients with MT4 platforms, does B-Books. Period.

Sometimes I wonder whether any of you has ever traded anything.... Correct and true information is easy to come by. Just put your money down and ask questions. I trade for a living and I do so with a passion, any of you doing the same???? Do you think I want to deal with a broker who's messing around with me and my money? I KNOW the business and that's why I know which questions to ask.

When I show up at a brokerage, they know I mean business, and they wouldn't dare not telling me the truth. I do my research to protect myself and my money, and I put my money where my mouth is. I even risk money when testing an entity (binary brokers in Cyprus, too!!!). I go the distance, I actually show up at the offices of a broker (or send my attorney), and I insist on talking to compliance, and legal if necessary. I don't make reference to "undisclosed sources". In some cases, I was even invited to check their IT section, where they actually control the automated matching of clients transactions. Have you ever tried to get in touch with NADEX and ask them a few serious questions?

I don't even want to go there anymore arguing with you about ECN (Electronic Computer Network) and STP (Straight Through Processing). It's totally obsolete when B-Books are involved. Get yourself an HONEST and REGULATED broker, and then ask the right questions. If you don't ask the right questions, you'll never get the right answer. Simple as that.

Bucket shops are everywhere. In forex as good as in binaries. Whatever comes from Cyprus, is a bucket shop and in most cases directly or indirectly linked to Israel and SpotOption, one way or another. I have described in detail how scammers work and how they set up shop. I have investigated this, I have hired attorneys for that, all on my own dime and time.

I actively help people with referring them to the right places where they can get honest help and support and legal advice, and in some cases they get an attorney at their side to file charges. I have no conflict of interest. Again, I am not getting paid by bucket shops. I give an unbiased opinion and cite facts.

The big companies, properly regulated in the right jurisdictions, by regulators who deserve the name, are not located on Cyprus or in Israel. And they wouldn't want to be connected to anything that smells like a bucket shop.

ANY entity, I mean ANY, that hides their true location, doesn't provide a corporate address that is correct, doesn't give you a phone number linked to that address, is a shady entity to say the least. THAT applies to EVERY ONE. "Domains by proxy" is the first indication of a scam. No home, no phone, no address..... You call that honest??? Honest people and companies do not need to hide their true location. A domain is NOT a legal entity. Check your own!! ....

I am a mean old man when it comes to scams and outright fraud, in trading for more than 35 years, done since times most of you weren't even born yet. My statements here and in other threads are NOT self-serving. I profit from nothing. I am not paid by advertising, I am not related to any institution, I am not a marketer of EA's or "Signal Service", I don't get paid by click, no commissions of any sort. I am totally independent................... But I do get utterly mad when people are mislead.