Binary Option Fraud Scam Alert By CFTC

Binary Scam Fraud Advisory

Before you trade binaries anywhere you need to be aware of this fraud alert put out by the CFTC.


  • These schemes from unregulated binary option markets include  (Some may be guilt of all but all are gulty of at least 1)
  1. Refusing to credit customer accounts,
  2. Denying fund reimbursement,
  3. Identity theft, and
  4. Manipulation of software to generate losing trades.
  5. Misleading return payouts
  6. Bonus structures and other practices that are meant to entice more funds from clients and make it more difficult to withdrawal them
  7. Not Being Registered with the CFTC/SEC and offering contracts to US Citizens


There currently are only three designated contract markets offering binary options in the U.S.: Cantor Exchange LP; Chicago Mercantile Exchange, Inc.; and the North American Derivatives Exchange, Inc. All other entities offering binary options that are commodity options transactions are doing so illegally. Source:


In addition the BSBC has issue a investor warning about RBOptions,,, Banc De binary, and also against unregistered binary options trading platforms


We have been telling people about all the horror stories we have heard about binary bucketshops (unregistered binary “brokers” that make you broker by emptyig your bucket and filling theirs) and what they have been doing.  Many have thought we where nay sayers or just Nadex promoters.  Well I do love trading on Nadex and I do think the bucketshops are total scam shops (I know this will piss off Banc De Binary that I post this but the beautiful thing about the United States is we have the right to free speech and our opinion (They tried to get me to stop posting things about them saying it was “defamation”). But now the CFTC is putting out the same alerts to watch out for binary bucketshops.

Plus the CFTC is now pursuing Banc De Binary for charges of violating US Regulatory clauses after kicking them out of the US read more here.

THE GOOD NEWS: Some binary options are listed on registered exchanges or traded on a designated contract market that are subject to oversight by United States regulators such as the CFTC or SEC, respectively, but this is only a portion of the binary options market.

Registered binary Option Exchanges in the USA regulated by the CFTC/SEC


  1. North American Derivatives Exchange: N.A.D.E.X. aka Nadex  D.M.C. Retail Click the link to open a nadex account. Or signup on our free member site using the link by clicking here.
    Also to see a sort video on why we like Nadex Binaries more than others click here 
  2. CME Group (hurricane options not really for retail traders CFTC NOT D.M.C.)
  3. CBOE (low volume, 2 markets, not a lot of expirations not widely available) SEC not CFTC


It is illegal for entities to solicit, accept offers, offer to or enter into commodity options transactions (for example, foreign currencies, metals such as gold and silver, and agricultural products such as wheat or corn) with U.S. citizens, unless those options transactions are conducted on a designated contract market, an exempt board of trade, or a bona fide foreign board of trade, or are conducted with U.S. customers who have a net worth that exceeds $5 million.

To date, only one entity that offers binary options has been granted status as a designated contract market— the North American Derivatives Exchange, Inc. All other entities that are offering binary options that are commodity options transactions are doing so illegally.

Check to see if the binary options trading platform is a designated contract market. To determine whether an entity is a designated contract market, you can check the CFTC’s website. Search ALL then go to North American Derivative Exchange by advancing through the pages.

Further entities that solicit or accept orders for commodity options transactions and accept, among other things, money to margin, guarantee, or secure the commodity options transactions must register as a Futures Commission Merchant. Entities that act as the counterparty (that is, they take the other side of the transaction from the customer as opposed to matching orders) for foreign currency options transactions for customers with a net worth of less than $5 million must register as a Retail Foreign Exchange Dealer.

THE BAD NEWS: Because of their lack of compliance with applicable laws (NOT REGISTERED BINARY EXCHANGES WITH THE CFTC), if you purchase binary options offered by persons or entities that are not registered with or subject to the oversight of a U.S. regulator (WITH ANYONE BUT NADEX, CBOE, CMEGROUP), you may not have the full benefit of the safeguards of the federal securities and commodities laws that have been put in place to protect investors, as some safeguards and remedies are available only in the context of registered offerings. In addition, individual investors may not be able to pursue, on their own, some remedies that are available for unregistered offerings.




  • CFTC warns traders about fraudulent schemes involving binary options and their trading platforms.

In fact, some binary options Internet-based trading platforms may overstate the average return on investment by advertising a higher average return on investment than a customer should expect given the payout structure. For instance, in the example above, assuming a 50/50 chance of winning, the payout structure has been designed in such a way that the expected return on investment is actually negative, resulting in a net loss to the customer. This is because the consequence if the option expires out of the money (approximately a 100% loss) significantly outweighs the payout if the option expires in the money (approximately a 50% gain). In other words, in the example above, an investor could expect, on average, to lose money.


The CFTC and SEC have received numerous complaints of fraud associated with websites that offer an opportunity to buy or trade binary options through Internet-based trading platforms. The complaints fall into at least three categories: refusal to credit customer accounts or reimburse funds to customers; identity theft; and manipulation of software to generate losing trades.

The first category of alleged fraud involves the refusal of certain Internet-based binary options trading platforms to credit customer accounts or reimburse funds after accepting customer money. These complaints typically involve customers who have deposited money into their binary options trading account and who are then encouraged by “brokers” over the telephone to deposit additional funds into the customer account. When customers later attempt to withdraw their original deposit or the return they have been promised, the trading platforms allegedly cancel customers’ withdrawal requests, refuse to credit their accounts, or ignore their telephone calls and emails.


The second category of alleged fraud involves identity theft. For example, some complaints allege that certain Internet-based binary options trading platforms may be collecting customer information such as credit card and driver’s license data for unspecified uses. If a binary options Internet-based trading platform requests photocopies of your credit card, driver’s license, or other personal data, do not provide the information.


The third category of alleged fraud involves the manipulation of the binary options trading software to generate losing trades. These complaints allege that the Internet-based binary options trading platforms manipulate the trading software to distort binary options prices and payouts. For example, when a customer’s trade is “winning,” the countdown to expiration is extended arbitrarily until the trade becomes a loss.


What Next?

  1. North American Derivatives Exchange: N.A.D.E.X. aka Nadex  D.M.C. Retail Click the link to open a nadex account.
  2. Or signup on our free member site using the link by clicking here to get 100’s of hours of free education on trading binaries.
  3. Also to see a sort video on why we like Nadex Binaries more than others click here 


Many excerpts taken directly from: and some is my “opinion” read the story directly to see all the facts.