CSA alerts Canadians: Beware binary options platforms
Calgary – The Canadian Securities Administrators (CSA) are increasingly concerned about the growth in the number of websites promoting offshore binary options trading platforms that are targeting Canadians. The CSA wants to make it clear: no business is currently registered or authorized to market or sell binary options in Canada.
Binary options are like “bets” on how an asset (currency, stock, etc.) will perform in a limited amount of time – they are “all or nothing” wagers, similar to gambling. However, even when investors see virtual gains, they often cannot access these profits as they don’t exist.
“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,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers. “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.”
Offering investment services or products, whether online or in-person, is a regulated activity. Investing with offshore companies operating outside of Canada can be risky and is a common red flag of investment fraud. Once offshore, it is often impossible for investors to recover their money.
Businesses illegally offering Canadians the chance to make quick and easy money from binary options are operating all over the world. CSA members are working together and with other regulators to share best practices in order to counter these widespread illegal activities.
The CSA encourages all investors to visit aretheyregistered.ca to check the registration of any person or company offering investments to Canadians. Anyone who has invested with, or has concerns about, an offshore binary options trading platform should contact their local securities regulator.
- Always check registration and enforcement history before investing.
- Be wary of giving out personal information (including credit card information) over the phone or internet.
- Don’t make a decision on the spot. Take some time to research the opportunity and review it with an independent third party.
- Ask to have written information about the investment sent to you.
- Make sure you fully understand an investment.
March is Fraud Prevention Month. Throughout the month, investors can follow tweets from @CSA_News for additional helpful tips and information on fraud prevention and being an informed investor. Investors can also visit the Investor Tools section of the CSA website to learn more about making informed investing decisions.
The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.