Regulator Updates; New Warnings, Fines, IQOption Vindicated

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Regulator Updates; New Warnings, Fines, IQOption Vindicated

Hawk-Eyed Regulators Are Cleaning Up The Industry

If you didn’t already know, regulators are cracking down on unregulated binary options brokers, fraudulent scams and misleading marketing tactics. This month the latest round of actions include warnings, fines and more.

First up is a shout out from the Danish regulatory authority, the Financial Supervisory Authority (FSA). This regulator has issued two warnings for brokers; TitanTrade and 23Traders. TitanTrade is a well know off-shore broker operating out of Belize. This broker has received numerous warnings ranging from countries within the EU to Australia, New Zealand and Canada. While not well known as a scam it is operating without proper regulation in those countries. The Danish FSA says the broker is no longer allowed to do business in their country. 23Traders is an unknown, offshore broker regulated in Vanuatu but nowhere else.

The British Columbia Securities Commission, well known in the world of binary options regulation, has issued yet another warning. This time they are targeting Redwood Options, yet another offshore unregulated broker hiding behind virtual offices. The complaint is that the company is soliciting residents of Canada without the proper licensing or registration. Redwood Options is one of the older and less trusted of the many SpotOptions white label brokers in existence.

The Spanish CNMV, the Commission Nacional del Mercado de Valores, issued a number of warnings in January including AAOption and IB Inversiones. The two businesses are accused of offering, illegally, financial services to residents in Spain. AAOption is a brand owned by Pacific Sunrise LTD, know for operating other scam brands, and registered in the Grenadines. It is a SpotOption white label and has ceased to operate due to regulatory hurdles. IB Inversiones is a firm offering investment advisory services, ie binary options managed accounts, and operating illegally under Spanish and EU law.

IQOption received a warning and fine last September in a surprise move by CySEC. The firm, which has a solid reputation, was charged with failing to adhere to best execution practice and fined 20,000 euros. The fine, a mere slap on the wrist compared to the $11 million fined to now defunct Banc de Binary, has now been rescinded due to new evidence. CySEC, after reviewing the initial ruling has declared the broker free of charges. Now that this matter is cleared up IQOption’s reputation has been solidified as leading broker. Click here for our review of IQOption.

The Industry Matures

This latest round of warnings carries within it a sign of maturity within the industry. In the past, warnings from regulators were just as likely to be against a broker regulated elsewhere as they were to be about actual fraudulent brokers. Now that has changed. Regulators, CySEC and EU/MiFID in particular, require their brokers to refrain from engaging with clients in non-regulated jurisdictions as part of their compliance. This helps the industry in a number of ways, perhaps most importantly by focusing the worlds attention on the truly fraudulent brokers so that the legitimate industry and trading community can get on with business.

IQ Option Fined €180.000 By CySEC for Outsourcing Operations

CySEC highlights €55,000 of fines for misrepresenting risks on company websites.

The Cyprus Securities and Exchange Commission (CySEC) announced that its second target for today is IQ Option, a brand operating under its CySEC regulated entity IQ Option Europe limited, which has received a fine totalling €180,000, according to the CySEC filing.

Friday is the day of no mercy for the Cypriot regulator with CySEC just releasing another fine of €138,000 against OptionRally. The fines imposed today are a good opportunity for other brokerage firms to learn from the mistake and make sure that they will carefully obey the Cyprus watchdog’s rules.

Although the IQ Option fine announcement was made today (September 30, 2020), the decision was made during the CySEC board meeting held more than three weeks ago, on September 5.

Commenting to Finance Magnates on the matter a spokesperson for the company stated, “The fine was issued based on the results of CySEC’s inspection which took place at the Company’s offices on the 11th of February 2020. At the time of the inspection (beginning of February 2020) some procedures and policies of the company, due to its vast growth, were still in the implementation stage and as such were not in accordance 100% with the Law. Enhancements have already been made in this regard, especially to the points mentioned in CySEC’s follow up letter.”

“It is important to note that fines are usually issued within 6 months of an inspection, so at the point of the fine, the majority of issues had already been resolved,” he elaborated.

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CySEC mentions in its statement that, among other things, that the company had taken mitigating actions in relation to: the provision of investment services in the Republic as well as the appointment of appropriate staff in Cyprus. Additionally it noted that IQ Option has updated its procedures manual in relation to policies and procedures and has taken other remedial actions.

“The above actions has been implemented within 2 months from the date of the inspection, that is beginning of April 2020. It was also noted by CySEC that the Company had not committed a similar violation in the past. Thus, the Company can confirm that, as at this moment, the information regarding non-compliance with governing regulation is outdated as most of the enhancements to procedures were implemented by the company in the beginning of April 2020,” the spokesperson explained.

Created in 2020, IQ Option is a binary options broker owned and operated by Alta Vista Trading Limited, Seychelles.

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The fines imposed by CySEC were due to multiple areas of non-compliance with:

  • the Investment Services and Activities and Regulated Markets Law of 2007
  • the Directive DI 144-2007-01 of 2020 of the Securities and Exchange Commission for the Authorisation and Operating Conditions of CIFs
  • the Directive DI 144-2007-02 of 2020 of the Securities and Exchange Commission for the professional competence of Investment Firms and the natural persons employed by them

Meanwhile, the given €180,000 fine is divided into 8 categories, according to the announcement. CySEC has explained how it arrives at the total fine based on the violations against the different parts of the provisions in the IQ Option regulation.

The reason that the commission breaks down the fines is to serve as a reminder to other binary options brokers that they will also get the same fine if they decide to act unfairly towards customers.

Details breaking down the fines are as follows:

First of all, the company was fined €5,000 for not having its head office situated in Cyprus. Another €10.000 fine was given as a result of failure to approve the information provided to clients over the chosen liquidity provider.

In addition, the company did not maintain adequate and orderly records of client orders, transactions and marketing material. CySEC further explained that IQ Option’s senior management did not commit necessary time and effort to performing its duties and did not adequately review the effectiveness of the policies set up for its compliance with its obligations, and did not take appropriate remedial measures.

The company was fined a sum of €20,000 for not taking reasonable measures to prevent the operational risks regarding the outsourcing of their operations to a different third party. Another €40,000 fine was imposed for not acting in a way that would benefit the clients when assigning the trading bonus to them.

CySEC has found out that the information provided on the site, clients’ online accounts and through marketing material was not explained in enough detail or was misleading. For this, they have been fined a sum of €30,000.

The binary options broker was also fined €40,000 for not asking clients to provide the necessary information regarding their knowledge and experience to assess whether the offered investment service or financial instrument was appropriate for them. On a related note, CySEC issued a fine of €15,000 since the information provided on the company website was not sufficient to allow clients to reasonably understand the nature and risks of the investment service the company offers.

Finally, CySEC highlights a €20,000 fine for not taking all the reasonable steps to obtain the best possible result for its clients when executing orders, which resulted in some cases in losses for clients when they could have made profitable trades.

IQ Option

Broker Name: IQ Option
Platform: BO, CFD, Bitcoin
Founded: 2020
Bonus: Low Minimum
Return/Refund:
No. Of Assets: 500+
Regulated: CySEC
Demo Account: Yes
Minimum Deposit: 10
US Traders: Not Accepted

IQ Option Review

IQ Option is a highly reputable broker that offers CFD, Cryptocurrency, Bitcoin trading and Digital Options (latter only available to Professional Clients). Their services are offered by IQOption Europe Ltd inside Europe and by IQOption Ltd outside Europe.

IQOption Europe Ltd is regulated by the CySEC under license number 247/14 and headquartered at Limassol, Cyprus. A list of countries accepted by IQ Option Europe Ltd. can be found at the bottom of this page**.

IQOption Ltd is also registered in St. Vincent and Grenadines (Registration No. 24840 IBC 2020).

Editor’s Note – Why IQ Option Doesn’t Suck in 50 Words

Finally, after what seems like ages, I find a broker that doesn’t look like a carbon copy of every other broker on the market. The company is trying to do something different starting with the website layout, the education and of course the innovative, highly functional, trading platform. They also offer a free Demo, and I mean free, without any of the shenanigans like “Deposit 100 bucks in a real account and we will give you a free demo”. I opened the Demo in about 15 seconds.

Why Does IQ Option Suck in 50 Words

Options trading is limited to Call/Put (high/low) style. That being said, this style is the most common and most used, so I don’t think there will be a lot of complaining about it and besides, they have so many other ways of trading (FX, CFD, Crypto, FX Options) that I’m sure you’ll find the right one for you. Also, keep in mind that binary (digital) options are now available only to Professional Clients!

Is IQ Option a Scam?

IQ Option is a very trusted broker, with a long time in the business and hasn’t raised any Scam suspicions so far. They are fully regulated, offer a low minimum deposit and so far there haven’t been any major issues with them.

In addition, the broker has maintained a relatively high and stable stream of traffic to their domains: IQoption.com and eu.iqoption.com. This means that the traders are satisfied and the company is healthy, with a good reputation. The broker also appears in the registry of multiple European regulators such as the British FCA (EEA Authorised – Reference number 670182), Consob, CNMV, and Bafin. This is a big plus because should a conflict with the broker arise, it’s easier to make a complaint against a registered company.

*General Risk Warning: The financial services products offered by the company provided by this website carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.

Should I Open an Account with IQ Option?

The first thing you will notice is that the home page is free of cheap marketing tactics like glamorous girls, limousines or stacks of money and to be honest that makes me feel like I’ve accessed a trading venue, not an online casino like a lot of the other brokers on the market.

IQ Option entered the marketplace in 2020, and since then they’ve done a great job at differentiating themselves from other brokers. First of all, their platform is proprietary; you won’t find it anywhere else. The most significant advantage is the charts, where Japanese candlesticks and many other technical indicators can be used. This is a big thumbs up because sometimes it’s hit or miss in regards to the trading platform and many times brokers severely suck when it comes to charting and additional technical tools.

Something that many traders will be happy about is the broker’s low minimum deposit of just 10 US Dollars, and of course, the free Demo account that is really free. Registration is easy and you can start trading immediately on Demo – for a real account, your IDs need to be verified as is the case with all CySEC brokers. Traders who want to feel “special” have the option to open a VIP account and they actually get VIP treatment, including increased payouts for successful options, extra learning material, and other benefits.

They offer more than 15 support centers worldwide and can be contacted via phone (UK: +44 20 8068 0760), email and live chat.

IQ Option New Features

IQ Option has developed into an advanced broker offering Cryptocurrencies, FX, CFDs, ETFs and Binary Options. Each asset class is categorized according to risk and reward. For example, there are 74 FX pairs to trade; they are classified as high risk but also high reward – the same as the 12 tradable Cryptocurrencies. They’ve recently introduced a large list of Stocks and 22 ETFs (Exchange Traded Funds). The latter is categorized by IQOption as low risk but low return. This is a quote taken from their website regarding ETF’s:

“EFT trading is a brand-new product and a fantastic way to expand your portfolio. ETFs work by tracking commodities, indices, and baskets of assets, and are traded in the same way as common stock on the stock exchange. Investors can sell short, buy on margin and buy as little as a single share in their chosen asset.”

While trading FX and some other asset classes, the position is set by default to close in case it reaches a 50% loss. As an example, if you open a $30 FX trade and price goes against you, causing a $15 loss, the trade will be automatically closed by the system. This is great because sometimes even experienced traders forget about setting the stop loss. Of course, this feature can be overridden if the trader chooses to.

As a brand new addition to their line-up of trading ways, IQOption has introduced FX Options, which are available to retail clients as well (note that Binary and Digital Options are only available to professional clients). FX Options is a proprietary instrument created by IQ Option, based on the concept of European style options but enhanced by the fact that an FX Option can be closed before it reaches maturity. The upside profit potential is unlimited according to IQ Option, while the loss is limited to the initial investment.

Another extra is IQOption’s blog that seems to be very up to date with interesting articles and titles to dig through such as: “Cryptocurrencies Buy & Hold vs. CFD Trading. What Is Better?” or “Why IOTA Recovery Is Not a Sign of Long-Term Growth.” I see several blog posts just from the previous 24 hours which is amazing. Most brokers have an outdated and “given up” calendar or blog, but this is excellent material and very recent.

IQ Option Complaints

There are both positive and negative reviews, which are standard for such a huge broker. Some traders have lost money thanks to their trading and simply appear to be posting angry comments while some have complained about the demo and real account being different (as a note, we haven’t experienced a difference between Real and Demo). That’s not unusual because it’s easier to control yourself and perform better on a demo account than a live account. On the plus side, IQ Option is registered and/or regulated by authorities around the world, so it’s easy to make a formal complaint if there is an issue!

IQ Option Regulatory Announcements and Warnings

30.9.2020: CySec fined IQOption for various reasons that were not in accordance with the regulator’s terms such as “non-compliance with section 38 of the law” which is about order execution. In January 2020, part of the fine was revoked by CySEC once IQOption IQOption managed to prove they were acting properly.

IQ Option Bonus

The bonus is no longer available at IQ Option in compliance with the new CySEC regulations.

How Long Does it Take for IQ Option to Put Money Back on my Bank?

The minimum withdrawal amount is $2 and the minimum deposit is $10. A withdrawal request will be processed within three business days. The money must go to the same source they originated to prevent money laundering. Also, before being able to withdraw, clients have to provide identification documents, which is another practice required by anti-money-laundering rules.

The time it takes for the money to reach your account depends on the method used. Usually, e-wallet transactions are completed in one day and bank transactions can take up to 15 working days (although IQOption’s processing time is just 1 – 3 days). The list of acceptable funding methods is Visa, MasterCard, or Maestro, WebMoney, Skrill, Moneybookers, and Neteller.

IQ Option Extras

Their innovative platform can be considered an extra feature, with professional charts that offer Japanese candlesticks, tons of technical analysis tools and macroeconomic news at the tips of your fingers.

Trading Bitcoin With IQ Option

IQ Option offers a wide basket of cryptocurrencies, one of the biggest that I’ve seen on a broker, including Bitcoin, Litecoin, Ethereum, Ripple, Tron, Dash, and others. Spreads are displayed in percentage form and at the time of writing, it was about 7% for Bitcoin, 8.4% for Bitcoin Cash but over 18% for Ripple. Crypto trading is limited to Contracts For Difference so you cannot buy and transfer digital assets to your crypto wallets.

If you are completely new to IQ Option, you will find their platform very intuitive and easy to use, but keep in mind that day trading (opening multiple transactions during a day) can be tricky and risky. Of course, you could potentially make more money than just holding on to your Bitcoin and altcoins, waiting for them to increase in value, but make sure you know what you’re doing.

IQ Option Ratings

User Friendly 19/20

The website is available in 13 languages and that is above average, but the platform can be a bit hard to get used to, especially for a new trader; however, I don’t think this will be a big problem because it’s pretty intuitive. Everything else on the website is well structured and easy to find. US traders are not accepted. Check the terms and conditions for the full list of countries that are not accepted. Demo accounts are available free of charge and without a time limit, as well as mobile applications for iOS and Android.

Range Of Markets, Spreads And Leverage 17/20

They offer hundreds of assets to trade, including 12 Cryptocurrency pairs (Bitcoin/USD, Bitcoin/Ethereum, Litecoin, Ripple, etc.) and 74 FX pairs, as well as tons of Stocks and 22 ETFs. Spreads are high (about 5 pips for EUR/USD at the time of writing) and can change during times of increased volatility. Leverage goes as high as 1:30 for Retail Clients and 1:500 for Professional Clients. Crypto assets only benefit from 1:2 leverage. Keep in mind that due to ESMA regulations, digital options are only available to Professional Clients; however, retail clients can trade FX Options.

Fees And Support 18/20

There are no commissions to open an account with this broker, which is standard for the industry. There is, however, a dormant account fee of 10 EUR after being inactive for 90 days in a row. A live chat feature is available and it’s actually pretty responsive but traders also have the option to use email/phone support.

Deposits And Withdrawals 19/20

The minimum deposit is $10. Both deposits and withdrawals can be made via bank transfers, Visa, MasterCard, or Maestro, WebMoney, Skrill, and Neteller. Withdrawals are processed within 1 – 3 business days but it can take up to 15 business days for the money to reach you, due to international bank transfers. The broker does not charge any commissions or fees for the above-mentioned withdrawal methods except for wire transfers, which incur a $31 fee.

Extras 17/20

As I mentioned before, their platform is extra on its own because it is unique. FX Options is another feature that merits some attention but during the experience I’ve had with this type of trading, it seemed a bit lackluster and I didn’t understand right away how to use it.

IQ Option Overall Ratings (90) + Regulated (+3) = 93/100

**Accepted Countries by IQ Options:” Europe Ltd: Austria, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lichtenstein, Lithuania, Luxembourg, Malta, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, The Netherlands, United Kingdom.”

*General Risk Warning: The financial services products offered by the company provided by this website carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.

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