Do not invest more money than you can afford to lose.
The International Financial Services Commission (IFSC) of Belize issued a warning notice on Monday regargind its decision to delicense BDB Services (Belize) Ltd., the local branch of over-the-counter (OTC) binary options broker Banc De Binary. The broker is no longer licensed in Belize over non-compliance with the local regulation.
The move was taken “[…] due to non-compliance to some conditions of the annex attached to the license granted for ‘Trading in financial and commodity-based derivative instruments and other securities'”, according to the notice. The regulatory body provided no other information.
BDB Services (Belize) has already been removed from the register with IFSC-licensed service providers for trading in securities.
Belize is known as an offshore destination and is renowned for its milder regulation and licensing requirements and lower incorporation costs. The IFSC rather relies on self-regulation by the companies, but nevertheless, a broker license is attractive to traders as it brings them a feeling of confidence and security when choosing a broker. The fact that such a flexible regulator has decided on taking back the license of Banc de Binary speaks on its own.
Banc de Binary is notorious for its unfair practices. It has been under the attack of a number of financial watchdogs, including those in Australia, New Zealand, the US, and others, as well as under the attack of clients who claim in online forums they have been scammed by the broker.
This year, Banc de Binary suffered several harsh fines, as well. In January, the broker had to pay €350,000 in settlement to the Cyprus Securities and Exchange Commission (CySEC), another one of its regulators. The regulator had found that the broker failed to comply with its requirements for authorization and has not informed clients about its services, risks, costs and charges that may occur.The CySEC said at the time Banc de Binary had already paid the amount.
In February, the broker agreed with the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to pay more than $11 million in settlement in relation to accusations that it has illegally offered off-exchange binary trading to US citizens and solicited tens of millions as a result. In the US, providing trading services in binary options is allowed only on-exchange and to regulated entities.
The delicensing by the IFSC is the latest strike to hit the broker. Whether this will make investors think before engaging with Banc de Binary and this is the beginning of the end for the broker is yet to be known.
Banc de Binary was founded in 2009. Its product portfolio consists of binary options on currencies, stocks,commodities, and indices. The brand operates out of several domains, including www.bancdebinary.com and www.bbinary.com.
The broker is left with a single license – that by the CySEC. Theoretically, the license grants the broker access to operate freely in all EU member states. However, binary options are not well-accepted in all EU legislations. Most reputable authority bodies have expressed intentions to restrict high-risk trading in instruments such as binary options. France and the Netherlands are in the process of developing bills that would prohibit the advertisement of risky instruments and Germany is also considering the possibility, but has not made any steps as of now. Meanwhile, Belgium banned from 18 August the distribution via online channels of OTC binary options, spot forex, and CFDs with leverage.
We strongly advise you to only deal with authorized brokers, authorized by reputable regulatory bodies like CySec, FCA, and CFTC/NFA, among others.
