Banc De Binary – Out of The US

To learn more about what is going on and how the US CFTC regulation is cleaning up the binary option markets click HERE (This link is not specific to any broker just general information to be aware of about things happening in the binary world of trading to help one know some things to ask and look out for when choosing where to trade.



Banc De Binary


CFTC Charges “Prediction Market” Proprietor Banc de Binary with Violating the CFTC’s Off-Exchange Options Trading Ban and Operating as an Unregistered Futures Commission Merchant


“Through its website, Banc de Binary allegedly unlawfully solicited and permitted U.S. customers to buy and sell options betting on the prices of wheat, oil, platinum, sugar, coffee, corn, foreign currency pairs, and stock indices.

The CFTC’s complaint also charges Banc de Binary with operating as an unregistered FCM from July 2011 through March 2013. Finally, the complaint alleges the company did not limit its options offerings to eligible contract participants, allowing U.S. customers to trade without requiring any information about their trading history or net worth.

David Meister, the Director of the CFTC’s Division of Enforcement, stated: “If a company wants to offer U.S. persons the opportunity to buy and sell predictions on the direction of commodity prices, the company must play by the rules or suffer the consequences. The applicable rules are on the books for good reason – to protect market participants and promote market integrity – and we will serve the public by enforcing them.”

The CFTC seeks civil monetary penalties, an injunction preventing Banc de Binary from engaging in certain commodity options activity with U.S. customers, and other remedial ancillary relief, including restitution, disgorgement, and rescission.

The CFTC acknowledges the Securities and Exchange Commission, the United Kingdom Financial Conduct Authority, and the Cyprus Securities and Exchange Commission for their assistance in the investigation of Banc de Binary”





Though many did not know that Cyprus existed a few months ago now nearly everyone does. At least one broker, Bank De Binary, is  in Cyprus. As I’m sure you all know Cyprus’ government recently proposed a one off tax to seized a % of bank funds from various banks and account levels.

To their credit they did post a statement that their clients where not going to be affected and as far as we know they where not. They stated they would absorb the cost for any accounts in Cyprus.

But my thought is what choice did Banc De Binary have to not have everyone withdrawing money..aka a  “broker run”? (Good they did it…But don’t know the answer but again it is a question worth asking)

How much are they making that they could afford that? Where does the money come from? (Again can’t answer the question but its worth asking)

However, the fact that the idea came up in this country at all or any country for that matter could easily alarm anyone.  If your funds are outside the US what remedies do you really have with US regulations? (Just another question worth asking)

Another thing to be aware of: Now the non-CFTC regulated binary broker Banc De Binary is no longer able to market to US Clients and as you can imagine this could make one a bit nervous. Warranted concern or not is of course up to each person to decide. Read below for more details.

To find out more about why we like Nadex so much and what to look out for in a binaries broker click HERE

 Banc De Binary Out Of The US

I heard in the rumor mill that Banc De Binary was having to get out of dodge. And they are – no more new us clients. Though they can still currently keep the old US Clients (For now…can you say get your money and run?? Up to each trader of course.)


But I heard that had a office on Wall Street?

Umm yeah try going there… No where to be found.

Here is the official statement on the matter:

Below it i have a screenshot of the online chat session. Was interesting to see how they responded to my last few questions….

“Phillip Brookes: Banc De Binary has announced that as of January 25 2013 it is in talks with the CFTC in order to obtain regulation for its operation as a binary options exchange in the United States. The New York headquartered company currently provides an online binary options platform where investors can trade on the direction of over 200 assets.

Phillip Brookes: The CFTC approached Banc De Binary after the company became the first EU regulated binary options brokerage (CySEC license 188/13). In accordance with CFTC requirements, Banc De Binary will not be accepting new US clients during the course of negotiations. Customers from abroad and existing US customers will still retain full access to all company services.

Phillip Brookes: Since its founding in 2009, Banc De Binary has complied with all federal and state laws regarding banking and compliance procedures. However specific regulation for binary option trading has not previously existed. The company has long voiced its desire for industry regulation so as to better protect traders, and has said that it would comply with all applicable procedures.

Phillip Brookes: The introduction of regulation in the EU, and now in the US, legitimizes binary options as a financial instrument in their own right and adds credibility to this relatively new and quickly growing industry. The acquiring of a license is recognized as the guarantee of a firm’s professional standards and financial security for clients.

Phillip Brookes: Banc De Binary made the decision to begin operating only in regulated countries in order to continue leading the binary options market and convert binary options into a viable financial product in the banking world. It looks forward to working with regulators worldwide in its commitment to providing a quality investment service to all clients.”

Banc De Binary - Out of The US



Here is the release:

Banc De Binary - Out of The US

Here is the retraction: Also the retraction is posted on their site.


And the really confusing part…it states they wont take orders from US Citizens. I understand they can’t open accounts. But their own statement on their website states they won’t take orders from US Citizens. Yet they are allowing those who had accounts before this went into affect to keep trading, aka placing orders. Does not make sense to me…does it to you?

Banc De Binary - Out of The US

Note they state they withdrew the press release. Why did they have to why would they make this statement and then pull it back? Of course I don’t know the answers but these again are questions you may want to ask…
That is a pretty big reversal “in talks with the cftc in order to obtain regulation” to “we are no longer taking us clients”…cause for concern? You decide….


Here is the short list of what I believe it would take for them to become a US Exchange.   This is maybe 1/100th of the things they would need to do to even get considered for the ability to apply as an exchange with the CFTC. This is simply opinion of course but it is a list that is worth looking at Ultimately that is up to the CFTC I don’t make the rules. They may meet some of these at this time and may not things change over time this is just a list of things I believe would have to be in place for a company to become a US CFTC regulated binary exchange…

  • They would have to have set strikes that are an official contract not open strikes at market price.
  • They would have to set expiration times (ie not build your option etc… – as the standard contracts have to approved by the regulatory body before being offered – not lets negotiate etc…)
  • They would have to base the settlement on an average from a neutral third party data provider not a last trade/print quote.
  • They would have to have a market maker willing to make a market that had absolutely no contact with them if they where to be an exchange.
  • They would have to have no vested interest (ie they don’t make more when you lose than when you win)
  • They will need instruments with a 1:1 or better not only have high risk/lower reward choices. ie 80% payout win vs 100% debit loss. So
  • Not do bonus plans that require trading levels for withdrawal (notice how most (maybe all?) the forex brokers in us don’t have this one anymore).
  • They would have to base the underlying on an actual traded instrument (ie not SPX but ES)
  • They would either need to choose stocks and go with sec or futures/fx and go with cftc. There is very little chance of getting stocks approved SEC is vary opposed to CFD style trades that act as a replacement for stocks.
  • They would have to drop all affiliate commission plans (ie paying out a % of account based on amount of funds deposited for referrals) and only work with US licensed and regulated FCM’s Brokers and IB’s.
  • They would have to have all the licenses required to meet the regulatory requirements in CFTC.
  • They would have to have the funding to meet exchange funding requirements…big bucks….
  • They would have to have everything fully collateralized and segregated
  • They would have to base their operations in the United States versus Cyprus.
  • Essentially they would have to have a whole new company as to change the things above would lose them a majority of their current business.

Nadex of course has answers to these questions….Gotta love Nadex…  Sign up as a free member and get access to 100’s of training videos, strategies, tools and more for free.

To get a demo account with Nadex click HERE.

To get a live account with Nadex click HERE.

To find out more about why we like Nadex so much and what to look out for in a binaries broker click HERE

To learn more about what is going on and how the US CFTC regulation is cleaning up the binary option markets click HERE (This link is not specific to any broker just general information to be aware of about things happening in the binary world of trading to help one know some things to ask and look out for when choosing where to trade.


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