The world has already seen a lot of binary options scams being busted out in the open but the number of binary options brokers which are fraudulent in nature just doesn’t seem to stop at all. According to a report by CNBC, traders have lost over $1.5 billion owing to binary option trades in the long run. The fun fact is that traders continue to fall prey to such atrocious practices in spite of losing their money. Most don’t stop until they go broke.
Illegal options transactions are pretty common. These brokers disguise themselves as top agents who seem to have top tier connections with the best banks across the world. They claim they have years of experience in spite of the fact that they started operations within a year or so. Such is the atrocity of such scammers that they hire fake people to appear in their videos and say that these people were once extremely poor and malnourished until they found that particular firm and ended up being rich overnight. Whosoever makes such dubious claims should be put right behind the bars for inciting a propaganda against such innocent traders.
The broker-dealer relation here is an interesting affair. First the broker makes sure that they win over the trust of these traders by offering profits for the initial deposits that they make. Later, the broker asks the trader to deposit a large sum so that the trader makes a lot of profits. The naivete of the trader makes them do so and what happens is that they eventually lose all their money at one go.
These binary options firms usually operate in third world countries which are not very developed and don’t have a lot of strict rules abiding them. Some of them include Nigeria, Seychelles and other countries where the financial system is extremely corrupt and no proper law is there to arrest the individuals if they are accused of a particular fraud.
It is recommended to stay away from such practices and verify the broker before deciding to invest with them.