The Final Days of Binary Options

The Final Days of Binary Options

Nothing hurts more than when promised wealth is not accumulated. With funding and investment, it hurts even more, as parties are to lose both confidence and funds at the same time. The situation in binary options looks exactly like that, with a large number of platforms turning out to be complete scams.

 

In this article, we go over the binary options and why we might be seeing the “end days” of the industry” right now. We also wish to use this review to promote caution in this particular sector and how investors should hedge themselves from risks that binary options carry with them.

The Downfall of Binary Options

One of the main reasons why binary options market is suffering these days are an overload of frauds. Many websites opened their operations for business with an idea to take away hard-earned money from investors. Their sheer number turned away a number of traders, while the exact number of funds stolen is not known.

Governmental actions also took a toll on the industry, where experienced binary companies are pressed to provide proper documentation and keep their client base. Using data presented by xBinOp, the site provides a table showing competitors in the field. The results are ironic, as it shows the industry overall.

To be sure, these are secure platforms. However, the number of losing accounts shows the decline of the market.

Continuous Security Issues

Scams are quite simple in binary options. You bet on an asset and win in the process. The service provider would either block your withdrawals or even manipulate with price data, as to show losses instead of wins. This scheme is quite common in the binaries markets and is used even to this day.

According to the Independent, the value stolen revolves around £59 million for past 5 years though it can easily be even larger, as data is not unified. Taking statistics from Action Fraud database, around 700 people reported a loss of £18 million in 2017 alone. Thus, it is quite easy to imagine why many well-known investors avoid binary options like a plague.

These numbers show only those investors that did come out and “admitted” that they dealt with binaries. Numerous other traders would not be so open to showing their trust being betrayed. Thus, the numbers above can quite easily double or even triple if we take into consideration everyone that got tricked by the malicious platforms.

Lastly, even if the platform provides legitimate services, the chances to make losses are large. Binary options only have two options – win or loss. Without thorough analysis and luck, most traders would experience a decrease of their balances, rather than growth. There are ways to hedge against unpredictable market trends when trading according to the mainstream contracts, binary options simply do not have these tools.

Governments’ View

Judging from the numerous reports around the globe, many governments opted for either a complete ban or tight restrictions. The limitations usually involve scrutiny of legitimate business and demands for full transparency. In that way, OTC (Over the Counter) platforms would be banned while registered firms within financial ministries would be allowed to offer the service. The third category of countries allows binaries to operate freely, meaning that investors take the risk and responsibility for their decisions.

To be sure, these are secure platforms. However, the number of losing accounts shows the decline of the market.

Continuous Security Issues

Scams are quite simple in binary options. You bet on an asset and win in the process. The service provider would either block your withdrawals or even manipulate with price data, as to show losses instead of wins. This scheme is quite common in the binaries markets and is used even to this day.

According to the Independent, the value stolen revolves around £59 million for past 5 years though it can easily be even larger, as data is not unified. Taking statistics from Action Fraud database, around 700 people reported a loss of £18 million in 2017 alone. Thus, it is quite easy to imagine why many well-known investors avoid binary options like a plague.

These numbers show only those investors that did come out and “admitted” that they dealt with binaries. Numerous other traders would not be so open to showing their trust being betrayed. Thus, the numbers above can quite easily double or even triple if we take into consideration everyone that got tricked by the malicious platforms.

Lastly, even if the platform provides legitimate services, the chances to make losses are large. Binary options only have two options – win or loss. Without thorough analysis and luck, most traders would experience a decrease of their balances, rather than growth. There are ways to hedge against unpredictable market trends when trading according to the mainstream contracts, binary options simply do not have these tools.

Governments’ View

Judging from the numerous reports around the globe, many governments opted for either a complete ban or tight restrictions. The limitations usually involve scrutiny of legitimate business and demands for full transparency. In that way, OTC (Over the Counter) platforms would be banned while registered firms within financial ministries would be allowed to offer the service. The third category of countries allows binaries to operate freely, meaning that investors take the risk and responsibility for their decisions.

Countries that banned binaries altogether are Canada, Belgium, and Israel due to several large-scale scams. North American, African, and Asian markets usually provide tight regulations, allowing only licensed businesses to operate in the industry.

Europe leads the way for binaries, as most EU countries provide small limitations on platforms offering binaries. Cyprus is currently home to many companies that operate, though the situation might change in near future. Still, a new set of regulations in July 2018, did limit the freedom significantly for businesses operating within EU zone.

There have been numerous reports of raids and arrests throughout the world, with the latest incident in the UK being a police’s search for 20 London-based companies in 2017.

Crackdown in Social Media

Let’s take a look at the development within the social media now, shall we? The Apple Company announced in 2017 that all binary options companies would be permanently banned from the platform, resulting in thousands of apps being deleted in a single day.

Soon after Apple, Google and Facebook both stopped their support for binaries, together with ICOs and cryptocurrencies as well. It’s important to note here that advertising is banned but companies did found ways to bypass limited access anyways.

Bad Reputation

The situation in which large technological companies, such as Google, Facebook, and several others, announced that binary option promotions are bad speaks volumes about the situation in the market. There are a large section of traders and investors alike that do not trust the market due to numerous scams in the past.

The present situation is not positive either, as many fraudulent websites still offer the “service” of binary options trading. Looking at the reviews from bloggers, most of these articles come off with negative vibe about the binaries, showing that, although the idea is legitimate, it is nothing more than gambling under the pretense of trade-like opportunities.

Add to that growing governmental pressures in many countries that allow binary options to exist, we can conclude that industry is facing either a very tightly controlled environment or full closure. New policies, as well as raids, do take a toll on regulated businesses, which experience high turnover of their clients.

Concluding Thoughts

Binary options might be facing their final days, judging from our findings. Governments around the world are creating new, stricter regulations on binaries, limiting companies and requesting responsibility for their actions. Additionally, due to numerous scams, the reputation of the marked soured down gravely, with a larger number of traders leaving the industry from those that enter it.

Thus, we would advise extreme caution, even with registered businesses. Binaries themselves are very risky and with a large number of frauds going around, it would be advisable to invest funds elsewhere. Visit our website at financerecovery.org and speak with an agent on how best to recover your lost funds.