The Australian Securities and Investments Commission (ASIC) has issued a warning against the Ubinary binary options broker. According to a publication on ASIC’s consumer website Money Smart, the broker is not licensed in Australia and the Commission believes it is a scam.
“Do not deal with this business as it is unlicensed in Australia”, ASIC writes and adds it has made unsolicited calls or sent emails about investing to Australian residents.
According to the publication, the broker has a business address in Zurich and a bank account to the name of Option Logic Ltd, registered in the Sofia branch of UniCredit BulBank. According to the broker’s website, however, it is run and operated by UB Innovation Limited, registered on the Marshall Islands. The broker, however, does not provide any regulatory information.
ASIC’s warning is yet another advisory against doing business with unregistered binary options brokers. Other national and regional regulators also issue such warnings, the most recent one being from Canada’s Manitoba Securities Commission (MSC) against CentralOption. It seems, however, that they have little effect, as the business of the unregistered binary options broker continues to flourish.
Binary options are a type of financial instrument very much akin to gambling. The “investor” bets on random events such as whether the price of a financial instrument will go up or down or whether it will reach a certain price within a very short period of time. It is an all or nothing proposition and the “investor” could lose a large sum very fast.
Binary options are usually offered in the portfolio of forex brokers, but there are companies who offer only trading in binary options. Some of them are properly registered and regulated, but many are rather shady affairs operating out of offshore zones, soliciting unsuspecting individuals and often swindling them out of large sums.
For this reason US only allows trading in exchange traded binary options, which are tightly regulated and less risky, while recently the Cyprus Securities Exchange Commission (CySEC) has introduced some new rules for binary options brokers.