The FBI is Organizing an International Fight Against Binary Options Fraud

It seems that the recent troubles facing binary options firms in various parts of the world are just about to get even more serious. The U.S. Federal Bureau of Investigation (FBI) issued a warning to the public yesterday that unregulated binary options websites are being used by criminals as vehicles to commit fraud.

While regulated binary options are listed on registered U.S. exchanges approved by the CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term, Cantor Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and NADEX, the FBI warns Americans that much of the binary options market operates through websites that don’t comply with U.S. regulations.

The FBI says that binary options fraud is a growing problem and that it is in its crosshairs. From just four complaints in 2011, it received hundreds of complaints with millions of dollars in reported losses during 2016. These generally fall into one of three categories: refusal to credit customer accounts or reimburse funds to customers, identity theft, and manipulation of trading software.

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The true extent of the problem isn’t even fully known according to the FBI. And it adds that some European countries have reported that binary options fraud complaints now constitute 25% of all the fraud complaints received.

International effort

The FBI revealed that it currently has a number of ongoing cases, in partnership with the CFTC and the SEC, and it is also backing an international approach to combating binary options fraud.

In January, it organized the 2017 Binary Options Fraud Summit, held at Europol in The Hague, bringing together law enforcement and regulators from North America and Europe to discuss the issue.

Special Agent Milan Kosanovich, which was one of the FBI’s representatives at this event, said: “The summit gave all of us the chance to sit down and talk about what we’ve discovered through our respective binary options fraud investigations, where the challenges are, and how we can all work together."

So the key to addressing this type of fraud,” he continued, “is national and international coordination between regulatory agencies, law enforcement, and the financial industry.”

He added: “Investors need to be aware of the significant potential for fraud on binary options websites, and they need to make sure they do their due diligence before ever placing that first trade or bet.”