The rapidly growing binary options market in the UK has led to the Gambling Commission warning consumers over potential scams that are masquerading as binary options trading platforms.
The organisation, which regulates all gambling activity within the UK, said that anyone considering binary option betting should spend time to carefully research the market before participating.
The Commission says that consumers should establish whether the operator they are planning to deal with has been properly licensed to operate within the UK.
This approval to operate binary option trading should be clearly displayed on websites and, says the Commission, that if a consumer has any doubts about the operator and where they are located then they should not use their service.
Binary option trading companies abide by a code of conduct
The Gambling Commission says that unlicensed binary option trading companies are probably operating legally and will not be abiding by a code of conduct.
The issue for UK consumers wanting to take part in binary option trading is that any money they lose when using unlicensed operators cannot be recovered and there is no compensation available.
Indeed, the Gambling Commission says that anyone who loses money on binary trading using unlicensed or illegal services should contact Action Fraud.
The warning comes after news from the Commission that financial betting may switch from gambling regulation to come under the remit of financial watchdogs.
Binary options, which is making a fixed bet on a financial market, is currently viewed as a gambling transaction in the UK but the government is now looking at regulating them as financial products.
Binary option trading to come under FCA remit
By doing so, all binary option trading will come under the umbrella of the Financial Conduct Authority (FCA) and in line with other European countries.
A UK Gambling Commission spokesman said: “For most licensed gambling operators this will have little impact on their business since binary options account for less than 1% of the regulated online gambling market.”
Binary options site is misusing AMF logo
Meanwhile, binary options traders are being warned that a site to promote Cypriot brokers is misusing the name of the French financial markets regulator.
The Autorite des Marches Financiers (AMF) says that the site optionbinaireamf.com is misusing its logo and name.
This is a comparison site for binary option brokers who are regulated by the island’s securities industry regulator, the CySEC.
But AMF says potential investors may be misled because their logo is being used on the front page without permission and the AMF is warning potential investors to stay away from the site since misusing their logo has been done without permission and is illegal.
AMF regularly warns about the risks involved with binary option trading and they have compiled a ‘black list’ of binary option traders who are unregulated.