Banc De Binary CEO Issues Statement One Month After Being Charged by the SEC and CTFC
The CEO of Banc de Binary Ltd, Oren Laurent, released a statement last week that Banc de Binary is still in talks with the CFTC (US Commodity Futures and Trading Commission) and SEC (US Securities and Exchange Commission) over allegations that they illegally accepted US customers on their online trading platform from May 2011 through to May 2013.
Last month, both the CFTC and SEC charged Banc de Binary with illegally selling binary options contracts to US investors. Under US law, it is illegal for unlicensed brokers to sell options contracts to US citizens unless done through a CFTC license exchange such as NADEX.
In addition to the charge, the SEC launched an investor alert on their website about the potential risks of investing in binary options with unlicensed brokers.
““Just because foreign companies can more easily communicate with American investors doesn’t mean they should skirt our longstanding laws that protect investors by requiring registration of securities,” said Andrew J. Ceresney, Co-Director of the SEC’s Division of Enforcement. “Banc de Binary contacted U.S. investors through the Internet and YouTube but completely disregarded the U.S. securities laws’ registration requirements. We will aggressively combat such conduct no matter where it originates.”
After keeping quiet for over a month, the CEO of Banc de Binary finally announced that they are still in negotiations with both regulators at present and that no further US clients will be accepted.
Mr Laurent also announced that he would be returning US client’s funds, which is likely to appease individuals who were tricked into investing their money with the company despite having less than $1,000 in their bank account.
Despite best efforts by the CEO to make a public statement on recent happenings, the exact future of Banc de Binary remains unclear. Although they are still trading and accepting European clients, no reference has been made to whether BDB has managed to reach an agreement with either the SEC or CFTC, which may incur a financial penalty that could cripple the Cyprus based company.
The future of binary options trading in the US is also still unclear. The costs involved in order for binary options brokers to adhere to regulatory requirements in the US are too high for most companies. This is because unlike other countries such as the UK and Germany, where the broker can place traders with individuals using its own in-house risk software, in American every trade must go through a licensed exchange.
Although the CEO of Techfinancials (one of the largest binary options software providers) has announced that they are working on solutions for US compliance, he says that for most brokers the costs involved in becoming a licensed broker on the NADEX exchange will be too high.