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Binary options are still not regulated in USA

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The US government doubts binary trading

The reason is that the US government is still pretty much uncertain about the recognition of binary options as a financial instrument and for that reason there is no proper regulation of it. Certainly the US market for binary options is big enough and profitable too, but still, companies offering binary options hesitate to take it over.

Binary options brokers in the US

Unlike the situation in the EU, where there are some countries which already have the proper legislation and regulation for binaries and more are taking steps in that direction, the situation in the US is different. That’s why getting certified by a Cyprus or UK authority is the first thing a binary broker does in order to legally offer financial services.

It is not against the law for US traders to trade binary options, but there is currently no proper regulation of binary options in the United States. Moreover, earlier this year, the US government warned US citizens of the risk that goes along with investing in non-monitored over-the-counter binary trading platforms.

A campaign held by the US financial authorities CFTC (Commodity Futures Trading Commission) and SEC (Securities and Exchange Commission) in order to deter US citizens from engaging in unregulated binary option trading.

US government charges a binary company

Furthermore, both regulators - CFTC and SEC worked together with the result of a charge against one particular company – Banc De Binary Ltd. The company has been charged with offering and selling binary options to US investors without first registering the securities, which is a violation of the federal securities laws.

As a result that particular binary options company, along with many others stepped away from the US market, not accepting US costumers, and focused on the EU and Japan markets where the jurisdiction concerning binary options trading is clearer and there is no such big risk of violating the laws.

Searching for the solution

Of course the US market owns a great potential for binary brokers, so companies search for different solutions such as integrating exchange-compatible systems which would enable on-exchange trading on the internet trading platforms while others are searching for a whole new binary product that would comply with the US legislation. Cracking the US market would definitely generate some expenses for the brokers, but it would certainly pay off well.

Waiting for the authorities to loosen the control

Searching for the right way to take over the US market, binary options companies still hope that the US government would spot the opportunities that the binary options market would bring to the financial sector with the huge taxes that foreign binary options companies would bring to the treasury.

They hope that getting a license from the financial regulators SEC, CFTC and FINRA (Financial Industry Regulatory Authority) would be made easier and legislation would not be an obstacle to offering and promoting their financial product.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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