Although a ban on the sale of binary options to retail investors in Canada formally took effect on Dec. 12, investment fraud remains an ongoing threat, according to the the Manitoba Securities Commission.
“This ban certainly supports our efforts to combat binary options trading and advertising in Canada. But the threat of binary options fraud still exists and victims are still coming forward,” says Jason Roy, chairman of the regulators’ Binary Options Task Force and senior investigator with the MSC, in a statement published on Tuesday.
Fraudsters may be switching their approach to other sorts of scams, the MSC warns
“With our attempts to stop binary options scams in Canada, fraudsters are adapting their approach to separate investors from their money. We’re already seeing the people and companies behind binary options fraud changing tactics in some cases, diversifying into products like forex and contracts for difference. The new trend is focussed on rising public interest in trading cryptocurrencies like Bitcoin, and initial coin offerings (ICOs),” says Roy.
While legitimate cryptocurrencies and ICOs are risky enough, regulators are increasingly worried about fraudsters taking advantage of the hype in these sectors to commit outright fraud.
“Scammers may be moving on to the next big thing,” says Roy, “Luckily, there are a number of red flags to look for with any kind of investment fraud.”
Common warning signs of investment fraud include a lack of registration, outlandish return promises, high-pressure tactics, and offshore entities, the MSC cautions.
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