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Binary options brokerage Epic Ventures Ltd., operating as 72Option, is conducting financial services in British Columbia without having the required regulatory authorization, the British Columbia Securities Commission (BCSC), a provincial financial regulator in Canadian, said in a notice last week.
Neither 72Option, nor its parent company are registered to trade in, or advise on, securities or exchange contracts in British Columbia, the regulator noted. Nevertheless, local residents were able to open a trading account with the broker. The BCSC warned investors to be cautious with entities that are not registered to operate in the country.
72Option, www.72option.com, claims to be based in Bulgaria’s Sofia. It does not provide information regarding regulation, but it is not licensed in its native Bulgaria.
The broker offers a web-based binary options trading platform with a minimum deposit requirement of $250 and maximum investment allowed JPY 100,000 or $1,000 (depending on customer’s account setting currency). Meanwhile, the minimum withdrawal amount is $500 for wire transfers and $100 for bank cards.
In binary options trading, investors guess whether the price of a certain instrument would go upwards or downwards within a pre-determined time frame. Once the time is up, the option is deemed expired and the bet is settled. Depending on the outcome, a trader either collects a profit, or loses money.
In Canada, capital markets fall under the regulation of provincial watchdogs and legislation rules may vary in from province to province. Binary options are not forbidden throughout the entire country, but providers of such instruments need to be regulated in order to operate. However, there is not a single binary options broker or platform authorized or licensed to operate in Canada. Under the BCSC’s legislation, binary options are treated as securities.
When engaging with unauthorized and non-regulated brokers, traders are putting their investments at higher risk. We strongly advise you to only deal with regulated forex brokers, authorized by reputable regulatory bodies like CySec, FCA, and CFTC/NFA, among others.