MFSA warns that the broker Stock Binary is likely a scam

MFSA warns that the broker Stock Binary is likely a scam


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The Malta Financial Services Authority (MFSA) published a warning that the binary options broker Stock Binary is misleading the public and is probably a scam. According to the announcement, in the contact section of its website, the broker is falsely providing the name and address of the company Binary Investments (Europe) Ltd. in Malta.

The latter is a binary options broker with a license and regulation for a Category 3 investment services provider in Malta and for gaming products. The former, however, is not regulated and is giving the false impression it is properly licensed and regulated.

“The MFSA therefore alerts the public, in Malta and abroad, to refrain from undertaking any business or transactions with the above-mentioned entity”, the watchdog said. It also reminded the public to be extremely cautious in their investments and carry out through checks of the companies they are investing with.

Under 2015 amendments to Maltese law, the binary options brokers must have a Category 3 Investment Services License, which allows them to provide any investment service, to hold clients’ money and to deal on own account.

Binary options are a type of wager, more akin to gambling, in which the investor is trying to guess the outcome of a relatively random event such as whether the price of an asset will go up or down or will reach a certain level, within a short period of time. It does not require significant investment experience and knowledge and inexperienced or more gullible individuals often fall prey to scams.

Binary options are either part of the portfolio of forex and CFDs brokers, or are being offered as a sole instrument. In recent times the binary options brokers are increasingly coming under fire from various regulators who are trying to reign in the uncontrollable increase of such brokers. In the US they are subject to strict regulations and control, while in Canada they are practically illegal.

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