Binary Options

Binary options are a type of investment where the payout entirely depends on the outcome of a yes/no proposition. The yes/no proposition is typically contingent on whether the price of an underlying asset (e.g. stock) will rise above or fall below a specified amount. Investors either stand to make a return or lose their entire investment in an all-or-nothing payout structure.

Binary options trading have been exploited by fraudulent and illegal operations specifically by:

• Manipulation of price data to induce customer losses
• Refusals or delays in the payout of realized gains to customers
• Failure to keep client funds in a dedicated trust account
• A lack of trade monitoring by third parties to ensure fair play
• Deceptive advertising and purposely overstated average returns on investment
• Charging of undisclosed fees (e.g. for withdrawing funds)
• Collecting customer information for identity theft purposes