Regulators are warning Canadians in regards to a spike in websites promoting “binary trading options platforms” used to bet how a regular or currency will work over a short period of time.
“No business is currently registered or authorized to promote or sell binary options in Canada,” the Canadian Securities Administrators warned Tuesday, adding that while investors may see virtual gains around the websites, they are often unable to collect the profits because “they don’t exist.”
The CSA, an umbrella organization for Canada’s provincial and territorial securities commissions, warned the options websites also expose investors to identity theft because they often request charge card information.
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Canadians who register “risk the threat of thousands of dollars in unauthorized withdrawals on their own charge cards and of being stuck with high-interest payments for any non-existent investment,” said Louis Morisset, chair from the CSA and leader of Quebec’s Autorit des marchs financiers.
The options platforms often operate offshore, according to the CSA.
“CSA members are working together with other regulators to talk about guidelines in order to counter these widespread illegal activities,” the regulatory umbrella group said inside a statement Wednesday.
