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FCA's binary blacklist of almost 100 firms offering unauthorised options trading
The UK financial regulator has published a list of 94 firms illegally offering binary options trading to British investors, many of which are suspected of hiding the fact that they are based overseas.
The Financial Conduct Authority listed 94 firms that are understood to be offering these high-risk, speculative products to UK consumers without proper authorisation, which is a criminal offence.
Binary options are a significant source of fraud in the UK, with 2,605 victims having lost a total of £59.4m on binary options scams since 2012.
Many of these firms on the FCA's binary options blacklist claim to be based in the UK, but the FCA said it believes most of the addresses provided are false and that the firms are actually based overseas.
UK providers include 365 Binary Option, Barclays Trading Invest (not part of Barclays banking group), BigOption, Binary Tilt, Strategy Markets, TorOption, Tropical Trade and VIP Brokers.
Overseas brands on the list include Alphabet Broker and Barkley Capital, both of Vincent and the Grenadines; BlackOpt24 of the Netherlands; Conut of Singapore; Instaforex of Russia, IGX Trade of Dubai; Infinitech Trading in New York; Option888 and Zoomtrader of Samoa; Options24hours of the Virgin Islands; PlusOption, Stern Options and uTrader of Romania; Binary St, Delta Capital Markets, RBinary, Stoxmarket and Win Options of the Marhsall Islands; and VXMarkets of Germany.
Last year the City watchdog warned firms that it would take over the policing of binary options from the Gambling Commission from 3 January as well as issuing a warning to consumers about the risk of investing in these products.
Since the start of the month all binary options providers trading in the UK have been required to be authorised by the FCA, with unauthorised firms that continue to offer binary options since then acting in breach of section 19 of the Financial Services and Markets Act 2000.
The FCA said it had compiled the list from tips received from its own monitoring of the market as well as from consumers and other regulators and agencies.
"The FCA is examining each of these firms to determine whether any are genuinely operating from within the UK. If they are, the FCA will consider taking enforcement action through the courts to stop their illegal activity."
The regulator reiterated its warning that binary option consumers "typically lose money, and these losses can be significant" and trading with an unauthorised binary options firm will not allow you access to the the Financial Ombudsman Service or Financial Services Compensation Scheme should things go wrong.
Firms that are authorised to offer binary options to UK consumers are listed on the FCA's register.