Banc de Binary Unexpectedly Closes its Doors
Banc de Binary, one of the biggest names and strongest pillars of the binary options industry, is closing its doors. The shocking news, which has been reported from sources within the company, brings an end to one of the first and most successful online over-the-counter investment brokers in the market. According to reports, the company has faced mounting problems over its reputation and public standing after a series of highly publicized misfires in 2016, as well as costly fines and sanctions that helped tarnish the company’s name.
The industry was shocked by the news, as BdB is one of the stalwarts of binary options, and has been a driving force of innovation and improvement in the industry since its early days. The company has stopped onboarding new clients, and has begun the process of returning funds to existing ones as it prepares to shutter all of its operations worldwide.
A Shocking Turn of Events
In an unexpected turn of events, sources within Banc de Binary confirmed to Finance Magnates that the company is in the process of closing its doors, pending an official announcement from its board of directors. The company has stopped accepting new clients, and has begun the process of returning funds to existing customers.
The news is a stunning blow to what was once one of the biggest earners in binary options, and a company many considered the standard-bearer for the industry. Per unnamed sources, the company is closing down after struggling to clean up its reputation following several damaging incidents in recent months. In 2016 alone, the company faced two large sanctions from European regulators and from the US Securities and Exchange Commission, forcing the company to pay over $11 million to settle the claims.
In a more embarrassing turn of events, the company had its license in Belize revoked by the International Financial Services Commission—a regulator long known for its friendly disposition toward the industry. In September, UK football club Southampton FC cancelled its partnership agreement with the company after two weeks without citing a motive, though rumors abounded regarding the reasons.
All in all, BdB could not shake the gray clouds that have been amassing around it despite their best efforts. The company released a notice warning about dealing with unregulated brokers to consumers late in 2016 and spearheaded an effort to eliminate the controversial bonus model that has become a staple of the industry. It even attempted to overhaul its business model to provide more transparency, but it appears all its efforts were for naught.
What it Means for the Industry
While it is a shocking fall from grace for Banc de Binary, the closing highlights a potentially worrying trend for the industry as regulators continue to clamp down and public opinion remains negative. Financial watchdogs across Europe have tightened their regulatory frameworks, and in some cases even moved to ban the industry entirely.
France banned advertising across all electronic media for binary options, with Germany and others contemplating similar legislation. Belgium has gone a step further and completely prohibited the industry from operating within its borders.
Meanwhile, the regulated members of the industry continue to be harmed by the image problems caused by unregulated brokers that engage in fraudulent and predatory practices that have landed the industry as a whole in legal hot water.
With one of its biggest names closing, brokers will now have to struggle with the thought that the current path may be unsustainable over the long-term. Only time will tell, how the industry combats the mounting challenges emerging in 2017.
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