$500 Million Company The Banc De Binary Is Closing Its Doors

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Banc De Binary seizes its operations

Anyone who has ever been interested in trading binary options must have run into Banc De Binary. Since it was founded in 2009, it grew to become one of the largest binary options brokers in the world. Now, it’s shutting down for good.

Banc De Binary is one of the many subsidiaries of the SpotOption exchange, which is based in Israel. As such, Banc De Binary also has offices in Israel and another branch in Cyprus, where it is registered to operate in Europe. Banc De Binary is merely the public face of the binary options trade, but SpotOption creates the quotes with which clients trade. According to allegations, one of the malpractices was that SpotOption was ‘creating’ quotes rather than quoting market prices, thus swindling clients out of their money. This is how Banc De Binary first started experiencing troubles.

The company was doing well – it had plenty of clients from all over the world, hundreds of employees and soaring revenues. It had even got a lot of publicity in recent years for sponsoring Premier League club Liverpool FC. A deal with Southampton FC in September fell through late last year due to mounting bad press.

The company’s troubles began just a year ago – in January 2020, Banc De Binary was fined 350,000 euro by the CySEC. According to the regulatory body, Banc De Binary had provided misleading marketing information and the company did not meet contractual obligations that should be found between client and firm. In addition, the brokerage did not fully inform clients about the risks involved in trading binary options.

A month later, in February, the CFTC and SEC fined Banc de Binary an amount totaling $11 million. Their main mistake – soliciting US clients under false pretenses. On the company’s website, it stated that it had offices in New York within the Trump Tower building, but it didn’t. Furthermore, the CFTC had already discouraged trading of binary options, but the company had gone around these restrictions.

Finally, on the 4 th of January 2020, Banc De Binary surrendered its license to CySEC, effectively shutting down its operations.

What happens now?

The process is going to take some time, the company has assets of around $500 million, and it can’t just close its doors in a day. All current clients have been advised to withdraw their money from their accounts, and after this is done, the board will make the final arrangements. Of course, this won’t affect SpotOption, only Banc De Binary, and you should not be surprised if the former created yet another subsidiary.

Banc De Binary won’t go quietly, though, and will leave other binary options brokers reeling from the aftermath. Brokerages dealing with binary options in Israel have been on the rise lately, and the Israeli financial regulators are in the process of creating legislation banning the industry. At the moment, there is already legislation in parliament awaiting approval to this effect.

The reason behind this is the increased trading of binary options worldwide with very little returns. One of the SpotOption sales managers was quoted in 2020 as saying that only 20% of all binary options traders’ make money. Several lawyers from the UK have also launched accusations against such brokerages claiming their clients lost a lot of money.

This is one of the reasons the CFTC has already issued warnings against trading binary options, and now other countries are seeking to either ban or regulate the trade.

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Banc De Binary is shutting down!

WARNING: This broker has been shut down due to numerous complaints and security issues. We strongly recommend trading with regulated and trusted brokers.

Banc De Binary is Shutting Down

Banc De Binary, an icon of the binary options industry and one of the most famous brokers in the world, has stopped accepting new traders! One of the biggest companies in the business will therefore shut down, which is certainly a huge shock for the trading community. The process of termination has already begun, and, as we are writing this, Banc De Binary’s clients are receiving their money back. This implies that the problem is not of financial nature. To find out why Banc De Binary is shutting down, stay with us and learn more about this incredible blow to the industry.

Banc De Binary is shutting down | Why?

For some time now, this company has been on the receiving end of some pretty negative press, especially in Israel and the United Kingdom, and accusations of Banc De Binary scam affected its performance and business capability quite significantly. Due to this, Banc De Binary’s reputation suffered, and the broker’s owners have now decided that they will not take it anymore. To put it simply, the situation has become unbearable. Although the official announcement has yet to see the light of day, the fact that the broker has renounced its CySEC license pretty much confirms that Banc De Binary is shutting down, with the company looking to leave without any further complications. If you’re looking for an alternative, we recommend reading our 24option Review and signing up with them. Another reputable broker in this field, they have the same minimum deposit requirement, an excellent platform and extremely capable staff, so they should be more than ready to offer an equally good service.

Banc De Binary is shutting down | Legacy

This behemoth of the binary options industry was founded back in 2009, and its value is now estimated at approximately half a billion dollars. Headquartered in Israel, but with an office in Cyprus, the company was always regarded as one of the industry’s elite. A huge number of traders and a sponsorship deal with Liverpool FC only strengthened that image. However, problems began to emerge at the beginning of 2020 when Banc De Binary EU operations earned the broker a 350,000€ fine from CySEC . One month later, a much bigger blow came from the US financial authorities, namely the CFTC, when Banc De Binary had to pay a whopping 11 million dollars due to illegal targeting of American traders. After that, it seems everything went downhill for the company and today, one year later, Banc De Binary is shutting down for good.

Banc De Binary is shutting down | Conclusion

One of the most famous binary options brokers is closing its doors, and the industry is about to lose one of its strongest brands. Fortunately, it seems the whole process is carefully planned so that no trader suffers any unexpected losses. The main reason for this move is increased media pressure, which has become too much for the owners to handle, but we suspect that a bad 2020 had a role to play in the decision, too. Since the situation is not likely to improve any time soon, Banc De Binary is shutting down. It will be interesting to see which company takes its place on the market.

The Rise and Fall of a Giant – Banc De Binary Timeline

Like it or not, Banc de Binary was one of the biggest brokers the binary industry ever generated. A Giant. Some may call it a Monster but that’s for others to judge, not for us. For years, Banc de Binary has been an active part of the binary options scene and now they’re closing their doors for good, renouncing their CySEC licence. This piece will show you the “history” of Banc de Binary, from inception to “death” and Yes, we will update it as necessary because the brokerage has closed down, but this is definitely not the end of the story.

First Steps for Banc de Binary

January 15, 2009: Banc de Binary is founded by Oren Shabat Laurent, who owns 50% of the company and is the 50% shareholder of ET Binary Options Ltd., BO Systems, Ltd., and BDB Services, Ltd (collectively known as Banc de Binary). According to some sources, the company was founded in Seychelles in 2008 but we could not confirm.

June 2020: The company has around 20,000 client accounts, according to the company’s founder.

August 2020: The same source states in an open letter that Banc de Binary now has 200,000 client accounts.

Licensing and Registration

January 7, 2020: the company is licensed as a Cypriot Investment Firm by the Cyprus Securities and Exchange Commission (CySEC), under licence number 188/13. According to Banc de Binary, all operations outside the European Union are conducted by BDB Services Limited (previous name BO Systems Limited), a company incorporated in Seychelles.

February 25, 2020: According to the Financial Services Register kept by the UK’s Financial Conduct Authority, Banc de Binary “is authorised or registered by … [CySEC] … and may be subject to limited regulation by the Financial Conduct Authority”.

By now the brokerage was already a recognizable name on the binary options scene but the increased notoriety meant an increasing number of clients… and not everybody was happy.

The Trouble Begins

June 5, 2020: The U.S. Commodity Futures Trading Commission (CFTC) files a civil Complaint, charging Banc de Binary with violating the “ban on off-exchange options trading by offering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting, and confirming the execution of orders from U.S. customers. The CFTC’s complaint also charges Banc de Binary with operating as an unregistered Futures Commission Merchant (FCM).” Source: CFTC Release pr6602-13.

April 7, 2020: The CySEC fines Banc de Binary 10,000 Euros for concealing existence of close links it had with another company when it requested CIF authorization. Source: CySEC Announcement (in Greek)

May 6, 2020: The CFTC amends the previous Complaint, “charging three corporate affiliates of Banc de Binary, Ltd. – E.T. Binary Options Ltd. (incorporated in Israel), BO Systems Ltd., and BDB Services Ltd. (both incorporated in the Republic of Seychelles) – also with violating the CFTC’s ban on off-exchange options trading by offering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting, or confirming the execution of orders from U.S. customers during the period from May 2020 through at least March 2020.” The CFTC also charges Oren Shabat Laurent as the Controlling Person of the Corporate Defendants and of the Banc de Binary Common Enterprise. Source: CFTC Release pr6923-14.

January 27, 2020: Banc de Binary and the CySEC reach a settlement according to which, the former will pay the latter the sum of 350,000 Euros under suspicion of possible violations of the Investment Services and Activities and Regulated Markets Law of 2007 (the “Law”), including but not limited to misleading marketing materials and the lack of sufficient information about the brokerage and its trading assets. Source: CySEC Board Decision

The End Is Nigh

March 9, 2020: The U.S. CFTC announced that a federal court in Las Vegas, Nevada, issued a Consent Order regarding the Complaint made on June 5 2020 and amended on May 6 2020, requiring Banc De Binary to pay 7.1 Million USD in restitution to U.S. customers who traded binary options offered by the Defendants. Banc de Binary was also ordered to pay a 2 Million USD civil monetary penalty. This was at the time and still is the biggest monetary sanction imposed to a binary options company/broker. Source: CFTC Release pr7336-16.

January 9, 2020: A Banc de Binary high-ranking official publicly announced that the company will stop accepting new clients and will close its doors due to “consistently negative press”. The news was first released by Finance magnates (financemagnates.com) and soon after, it was confirmed on the official CySEC webpage in an Announcement that also revealed that Banc de Binary renounced its authorization, which lapses as from January 15, 2020. The CySEC also informed that Banc de Binary will remain under their supervision until they fulfil the obligations towards their clients.

Almost immediately after the news hit mainstream media, London-based law firm Giambrone announced they are looking to gather documentation and preparing litigation against Banc de Binary on behalf of clients that complained about fraudulent practices employed by the binary brokerage.

What’s Next?

It seems a bit weird that a $500 million company decides to simply close shop, return all the money in accounts to their owners and be gone forever. It is very likely that we will see a rebranding of Banc de Binary, where the owners and key persons decide to start another brand and continue to sell their services. However, that’s just speculation and I don’t really like speculation. What we know is that an important chapter in the Big Binary Options Book has just closed… but the story is far from over.

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