The Canadian Securities Administrators (CSA) is reinforcing its cautionary message to investors who use their credit cards to access binary options trading platforms online.
The CSA states it is increasingly concerned about the growth of the number of websites that promote offshore binary options trading.
“The CSA wants to make it clear: no business is currently registered or authorized to market or sell binary options in Canada,” the regulators say in an announcement released Wednesday.
Binary options are “all or nothing” bets on how an underlying asset will perform in a limited amount of time. A person can have as little as 60 seconds to predict the market’s quick fluctuations, according to the CSA.
These trading platforms are often based overseas and so the investor’s money is moved out of Canada, which makes it almost impossible to recover those funds if something goes wrong, according to the CSA.
“Canadians are exposing themselves to the high risk of identity theft and fraud when signing up for these platforms that often request their credit card information,” says Louis Morisset, chairman of the CSA and president and CEO of the Autorité des marchés financiers, in a statement.
“The CSA warns investors that if they deal with these platforms, they risk the threat of thousands of dollars in unauthorized withdrawals on their credit cards and of being stuck with high-interest payments for a non-existent investment,” he adds.
The CSA is encouraging investors to check the registration of any person or company offering investments in Canada through the website, www.aretheyregistered.ca.
“Anyone who has invested with, or has concerns about, an offshore binary options trading platform should contact their local securities regulator,” the CSA states.
The issue of binary options trading is one that the federal regulator and individual provincial securities commissions continue to follow.
The Manitoba Securities Commission (MSC) issued a warning earlier in March to investors about unregistered trading occurring through onetwotrade.com, a binary options website operated by Up and Down Marketing Ltd., purportedly located in the country of Malta.
See: MSC issues warning on binary options
The MSC’s message echoed a similar warning about the same website from New Brunswick’s Financial and Consumer Services Commission in October.
As well, the Alberta Securities Commission has named binary options trading as one of its top investor risks for 2016.
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