As already mentioned, after a long public debate, AMF in France decided to ban all binary options and forex advertisements, while almost at the same time Belgium banned binary options trading completely. Despite the high expectations by local regulators, binary options public got a chance to watch the same scenario that happened when Israel banned binary options trading.
Bans of Binary Options Expose Traders to Scams
Unregulated brokers overcrowded the market, and as they are not regulated, the companies behind them are much harder to track and fine in the end. Also, bold presence of unregulated binary options brokers means that traders are less protected and are exposed to higher risk.
In case something goes wrong, traders can’t count on local regulators, as they are often helpless and don’t have enough knowledge or resources to put end to scam brokers often operated by several different companies, depending on the occasion. Recently, ASIC announced they will try to prosecute people responsible for TitanTrade scam, that is known as one of the biggest in the industry but resolving this complicated case will take a lot of time and effort.
Regulated binary options brokers already carry a heavy burden of complying with all requirements imposed by regulatory bodies. Even though they offer more realistic, better and safer trading conditions, they are often under a lot of pressure and have to offer their product in unfavorable market conditions, alongside with being constantly scrutinized by regulators controlling all paperwork and other aspects of trading. Of course, this means that traders are more protected and can trade in the safe and regulated environment, but it also demotivates brokers from becoming registered and licensed financial trading service.