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FBI: Losses from binary options fraud run into the millions

Mar 14 2017
By
Jonathan Smith

 It seems that the regulators and law enforcement agencies across the world are finally becoming aware of the risks of trading in binary options. Within just a day, two more entities – the Monetary Authority of Singapore (MAS) and the US FBI have issued warnings against dealing with unregulated binary options platforms and brokers. 

 
In a publication entitled “Binary Options Fraud, A Word of Warning to the Investing Public” the FBI notes that the binary options fraud is a growing problem and says that between 2011 and 2016 the number of complaints and sums lost to this type of scam have grown exponentially. “In 2011, our Internet Crime Complaint Center (IC3) received four complaints—with reported losses of just more than $20,000—from binary options fraud victims. Fast forward five years, and the IC3 received hundreds of complaints with millions of dollars in reported losses during 2016”, FBI said, adding that those figures reflect only the filed complaints. The true extent of the fraud, which is international in its nature, is not really known, but some European countries have reported that binary options fraud complaints now constitute 25 percent of all the fraud complaints received. 
 
In its publication FBI lists the most frequent types of fraud employed by scam binary options platforms: Refusal to credit customer accounts or reimburse funds to customers, identity theft and manipulation of trading software. The US law enforcement agency also warns that the fraudsters go to great lengths to recruit investors by advertising on social networks, trading websites, forums and through spam e-mail, cold call from boiler room operations and pressure their victims to invest.
 
Further the FBI advises investors to check whether the binary options platform they want to deal with is registered with the relevant US financial regulators: SEC, NFA and CFTC. According to US regulations, only binary options exchanges registered with those entities are allowed to offer their services in the country. Other binary options brokers, including those regulated by watchdogs, are considered illegal in the US.
 
 
TAGS: fbi  binary options  fraud  warning  us 
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