The Canadian Securities Administrators (CSA) is warning investors to exercise caution when considering an investment in binary options.
The CSA has become aware of multiple websites promoting binary options trading platforms that are soliciting Canadians. Many of these websites are trying to lure investors by making untrue and/or misleading statements about Canadian securities regulators’ oversight of binary options.
Binary options are essentially “bets” on how a particular underlying asset will perform in a limited amount of time. Despite listing Canadian contact information, many binary options trading platforms are based overseas purportedly in countries like Cyprus, Belize and the Seychelles, and the companies managing these platforms are often not registered to conduct business in Canada.
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, the CSA says.
Once offshore, it can be nearly impossible for an investor to recover their money, the CSA says.
The CSA encourages all investors to visit aretheyregistered.ca to check the registration of any person or company offering binary options to Canadians.