Australian brokerage firm Vantage FX has abandoned binary options and is shifting its focus to forex trading. The move comes as the binary options industry faces intense scrutiny from regulators across the globe.
The binary options instrument is developing a bad reputation as more fraudulent activites and scams come to light. Vantage FX follows other brokerages, including Anyoption and 24option, that have eliminated options trading altogether to avoid being embroiled in the controversy. Some countries have already banned or are considering banning binary options.
Vantage FX will now focus on forex, indices and commodities.
"Following a decision from company management, Vantage FX has ceased offering binary options trading to our clients effective immediately," Vantage FX said in an announcement on its website. "The primary focus of Vantage FX will always be to provide world class trading access to forex, commodities and indices markets via the powerful MT4 platform."
The company is encouraging binary options traders to transition to its MetaTrader 4 platform and begin trading under electronic communications networks (ECN) conditions.
Vantage FX is a Sydney-based brokerage and is regulated by the Australian Securities and Investments Commission (ASIC).
In May, 24option announced it was leaving binary options to focus on contract for difference (CFDs) and forex as news broke of new binary options scams and fraud. The company no longer accepts deposits for options from new traders. New deposits will be accepted from existing binary options traders for a short period of time before the company closes its doors to the instrument for good.
Just last week, the U.S. Commodity Futures Trading Commission, or CFTC, filed a $16 million suit against Jason Scharf and Michael Shah, who were allegedly trading illegal binary options contracts. Companies belonging to Shah and Scharf were not properly registered, and the defendants made false claims on the returns investors would see.
"The CFTC continues to be committed to rooting out and prosecuting binary options fraud in our markets," CFTC Director of Enforcement James McDonald said.
The U.S. is not the only country cracking down on binary options. The ASIC also issued a warning late last week against 72Option. The regulatory body expressed concern the brokerages may be running a scam operation.
The company is allegedly soliciting clients via email and phone despite not having an Australian Financial Services or Australian Credit license.
The ASIC has strongly advised against trading with the 72Option brokerage.
Disclosure: The author does not own any positions in the mentioned equities.
