Apple and Google have removed unlicensed binary option mobile apps that have been identified by the corporate watchdog.
The Australian Securities and Investments Commission’s (ASIC’s) review in March on binary options trading apps found over 330 apps which were offered to Australians by entities and individuals appeared to be unlicensed.
Of the 330, 63 per cent were offered by binary option issuers and facilitated trading, 25 per cent were from various signal providers, and the rest were controlled by introducing brokers or were apps designed to influence people to trade binary options.
ASIC was also concerned that:
- Many of the mobile app descriptions contained statements which appeared to be misleading about the profitability of trading and the amount of profit that could be made. For example:
- “Earn up to 90 per cent in less than an hour, in fact you can profit quickly as 60 seconds and profit as much as 620 per cent via one trade”; and
- “[Our app] generates around 85 per cent profitable signals from the top traders to guarantee the safe trading.”
- The majority of these apps failed to outline the risks of trading binary options, with 80 per cent having no risk warning at all;
- Some apps from introducing brokers made it appear they were the issuer of the binary option and did not clearly inform investors if and how they would be compensated for referral business; and
- Some binary option review/education sites were merely collecting personal information which could be used for high-pressure cold calling. For example, some developer websites associated with the apps promoted their ability to deliver traffic to casino, lottery, forex, and binary option service providers.
ASIC contacted Apple and Google and both entities removed the relevant apps identified by ASIC from their app stores. Apple also changed its review guidelines to state that apps that facilitated binary options trading would not be permitted in its app store.
Commission Cathie Armour said: “This is a timely reminder for investors to remain vigilant and not fall for flashy advertising or hard selling. Investors also need to make sure any financial service provider, regardless of the way that financial service is being provided, is adequately licensed and authorised to provide those services”.
“In an age where technology can hide who is offering and controlling a product, buyer beware has never been so important. If something appears too good to be true, it probably is,” she said.
