Binary Option Scams – Warning against TraderXP
One of the largest regulators of financial markets, CySEC (Cyprus Securities and Exchange Commission), based on the island of Cyprus, issued a statement on its website to warn traders of binary options broker TraderXP. The official document of the regulator regarding TraderXP notes that the broker does not have any authorization from the CySEC for their financial activity and, therefore, they can’t pose as a banking service or investment services company in a legal manner, which is what the broker has been managing to let its customers to believe.
The license coming off a regulator is a true permission, it is vital for a binary options broker. The regulations drafted by the CySEC dictate all binary options brokers wishing to offer their services in the Cypriot and European markets to obtain this authorization request to the regulator. A binary options broker offering investment services in the financial markets but without a license to do so would be committing an offense and that is why TraderXP is being criticized for, regarding that the company does not have any authorization to carry on business brokerage.
Coming from the company’s information available online, it seems that TraderXP has its headquarters in London (UK), however, it is still obvious that the broker lacks any regulation or license coming from any market regulator local financial (FCA) whether local or international. No European regulatory authority has granted permission to TraderXP, so this partnership is logically banned on European soil and in theory they have no right to proclaim any sort of appeal.
The CySEC regulator entity became the first organization of European regulations to consider binary options as a true financial product, as CFD (Forex), stocks or indexes, or any product where traders look forward to speculate through their brokers. The CySEC will not doubt to punish and to impose significant sanctions on the unlawful binary options brokers. The industry has still to suffer the consequences of not providing a trustworthy environment; binary options has been stigmatized and considered as a game of chance, a true product of similar bets just like online casinos or sports books. Now that the binary option is recognized as a true investment product, the CySEC will try to save its image, by penalizing unlawful brokers and rewarding the best binary options brokers.
To all this we add that the warning CySEC has been sent to other regulators in the European Union. The Maltese regulator (LGA), which, moreover, regulates another broker called OneTwoTrade, immediately took the same steps of CySEC, also warning the traders which utilize TraderXP’s services. Recently, the CySEC license granted to broker 24Option demonstrates official recognition of the CySEC to the broker. It is also a guarantee of safety, because traders can work with regulated brokers as they are further protected by the regulator.
Other regulated binary options brokers have been licensed by the CySEC and some are regulated in France, having obtained a license from the Authority for Financial Markets, the AMF and the ACP, French Authority Prudential Control, they are allowed to trade within certain European boundaries.For example, there are TopOption and OptionWeb, which are both regulated brokers. It is better to opt for this type of brokers, who have demonstrated their trustworthiness, and stay away from unregulated brokers, such as TraderXP.