Binary Industry Binary Industry
by Martin on February 16, 2017

Banc De Binary seizes its operations

Anyone who has ever been interested in trading binary options must have run into Banc De Binary. Since it was founded in 2009, it grew to become one of the largest binary options brokers in the world. Now, it’s shutting down for good.

Banc De Binary is one of the many subsidiaries of the SpotOption exchange, which is based in Israel. As such, Banc De Binary also has offices in Israel and another branch in Cyprus, where it is registered to operate in Europe. Banc De Binary is merely the public face of the binary options trade, but SpotOption creates the quotes with which clients trade. According to allegations, one of the malpractices was that SpotOption was ‘creating’ quotes rather than quoting market prices, thus swindling clients out of their money. This is how Banc De Binary first started experiencing troubles.


Legal troubles

The company was doing well – it had plenty of clients from all over the world, hundreds of employees and soaring revenues. It had even got a lot of publicity in recent years for sponsoring Premier League club Liverpool FC. A deal with Southampton FC in September fell through late last year due to mounting bad press.

The company’s troubles began just a year ago – in January 2016, Banc De Binary was fined 350,000 euro by the CySEC. According to the regulatory body, Banc De Binary had provided misleading marketing information and the company did not meet contractual obligations that should be found between client and firm. In addition, the brokerage did not fully inform clients about the risks involved in trading binary options.

A month later, in February, the CFTC and SEC fined Banc de Binary an amount totaling $11 million. Their main mistake – soliciting US clients under false pretenses. On the company’s website, it stated that it had offices in New York within the Trump Tower building, but it didn’t. Furthermore, the CFTC had already discouraged trading of binary options, but the company had gone around these restrictions.

Finally, on the 4th of January 2017, Banc De Binary surrendered its license to CySEC, effectively shutting down its operations.

What happens now?

The process is going to take some time, the company has assets of around $500 million, and it can’t just close its doors in a day. All current clients have been advised to withdraw their money from their accounts, and after this is done, the board will make the final arrangements. Of course, this won’t affect SpotOption, only Banc De Binary, and you should not be surprised if the former created yet another subsidiary.

Banc De Binary won’t go quietly, though, and will leave other binary options brokers reeling from the aftermath. Brokerages dealing with binary options in Israel have been on the rise lately, and the Israeli financial regulators are in the process of creating legislation banning the industry. At the moment, there is already legislation in parliament awaiting approval to this effect.

The reason behind this is the increased trading of binary options worldwide with very little returns. One of the SpotOption sales managers was quoted in 2013 as saying that only 20% of all binary options traders’ make money. Several lawyers from the UK have also launched accusations against such brokerages claiming their clients lost a lot of money.

This is one of the reasons the CFTC has already issued warnings against trading binary options, and now other countries are seeking to either ban or regulate the trade.

By Martin

Martin is a professional trader with 7 years of working experience in a Cyprus based brokerage. After the experience, he moved to the UK where he became a financial news reporter at a local news outlet. His years of experience of trading helps him deliver the most quality news, while also analyzing the impacts of it on various markets.

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Comments (5 comment(s))

Simon Lai
March 21, 2017
Hi, I got an account with Banc De Binary and a balance amount of USD 509.50. I just login and try to do some trading but without any success. Can someone help me out. Rgds Simon
May 11, 2017
I have the same problem. They responded to my live chat to say request withdrawal of funds.BUT I can't get into my account. Help needed! Anyone?
May 22, 2017
G to spotoption exchange website, then click on associates...Banc de Binary is one of them and you will be able to access your accounts from there.
James Roy Powell
November 9, 2017
I set up an account with Banc De Binary March 2016 I lost £47500 Can anyone help me to try and recover, I have made a complaint to The Financial Ombudsman and Cyse of Cyprus
December 3, 2017
i have received call from one law firm to tell me that cysec announce a names of some clients that will receive compensations of their lost with the company , do you have any informations olease