FBI warns investors against Binary Options fraud, as it published a word of warning just yesterday. In the notice, the FBI advises to exercise caution. What do you need to know?
13 March, AtoZForex – Binary options industry is facing a series of challenges all over the world. Also, various regulators are banning Binary Options activities and promotions globally. The most recent trouble for Binary Options sector is the biggest in time. Particularly, the name of the trouble – the US Federal Bureau of Investigation (FBI).
FBI warns investors against Binary Options fraud
The US FBI has published a warning cautioning the public against unregistered Binary Options websites. The FBI stated that unregulated Binary Options websites are used by criminals as tools to commit fraud. Where regulated Binary Options are listed on official US exchanges approved by US CFTC, NADEX, and Cantor Exchange, the FBI cautions US citizens that a number of Binary Options brokerages operate via websites that do not comply with US regulatory frameworks.
Moreover, the FBI states that the Binary Options fraud is on the rise. The agency adds that it is in its crosshairs. Specifically, from just four complaints in 2011, the number of complaints grew to hundreds. Clients have reported losses worth of millions of dollars during last year. The FBI reports that the complaints mainly fall into one of three categories:
Refusal to credit customer accounts or reimburse funds to customers. This is usually done by canceling customers’ withdrawal requests, ignoring customer phone calls and e-mails, and sometimes even freezing accounts and accusing the customers themselves of fraud.
Identity theft. Representatives of binary options websites may falsely claim that the government requires photocopies of your credit card, passport, driver’s license, utility bills, or other personal data.
Manipulation of trading software. Some of these Internet trading platforms may be reconfiguring the algorithms they use in order to purposely generate losing trades, often by distorting prices and payouts. For example, if a customer has a winning trade, the expiration time is extended until the trade becomes a loss.
The FBI adds that it does not know the full extent of the problem. Additionally, it says that some of the European countries have already reported that Binary Options fraud complaints now account for 25% of all the fraud complaints received.
FBI joins forces with European regulators
Furthermore, the FBI informed the public that it currently has a number of ongoing cases. It is in sync with the key US regulators, CFTC and the SEC. Moreover, it supports an international approach to fighting Binary Options fraud.
In the beginning of the year, the agency has organized the 2017 Binary Options Fraud Summit, which took place at Europol in The Hague.
The summit has brought law enforcement and regulators from North America and Europe together to discuss the matter. Moreover, Milan Kosanovich, Special Agent at FBI has stated:
“The summit gave all of us the chance to sit down and talk about what we’ve discovered through our respective binary options fraud investigations, where the challenges are, and how we can all work together.”
Mr. Kosanovich was representing FBI at the summit. He has added:
“Investors need to be aware of the significant potential for fraud on binary options websites, and they need to make sure they do their due diligence before ever placing that first trade or bet.”
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