Binary options regulation in 2018

The year of 2017 has been quite bad for the whole binary options industry. This has led many brokers to add FX and CFD trading instruments to their offers (like IQ Option) or even completely abandon binaries and offer only currency and CFD trading services (like 24option). The main reason behind such drastic changes is rather simple – European and Israeli regulations.

Most of the binary market was located in the above-mentioned countries. While the story with Israel is quite simple, the country hosted a bunch of unregulated and regulated brokerages, which were then prohibited by the local authorities, the CySEC changes are mostly driven by the European Banking Authority. Long story short, European Union does not want binaries to be offered at all, or at least by the companies that are regulated by the European bodies.

Now it is time to take a look at the possible scenarios of the binary options regulation in the coming year and see if we could still buy our call and put options with trusted companies.

Best examples come from gambling

Unlike financial trading, online gambling has been around for much longer. And most of the updates in the financial regulation (especially in terms of online businesses) have already taken place in iGaming sector previously.

Throughout the history, European gambling regulators were not allowing any online companies to apply for the license. Such a practice received a name of the grey area, a situation where one operates without a license simply because he is unable to apply for one. In late 2016 and early 2017, many European countries (like Poland and the Czech Republic) have allowed gambling companies to file an application for the license, yet the conditions for getting one are so harsh that most of the companies decided to simply abandon these markets. This gave birth to various online bitcoin casinos, companies that can accept the payments anonymously and cannot be blocked by the various credit card processing companies. While many may assume that players would opt in for regulated online casinos, they actually prefer bitcoin casinos for one simple reason – these companies make much better money, hence they can provide much better support services, a wider scope of games or just fatter bonuses.

Hence, one of the obvious conclusions which we can draw here is that some binary options brokers will completely avoid European regulations and will simply switch to accepting only payments in the bitcoin or other cryptocurrencies.

How about actual regulation?

Well, going fully unregulated is certainly an option. Binary brokers like this have been around for years, yet it is quite possible that within 2018 they will be blocked by all of the major payment processing companies. So how one can avoid being blocked by the payment processors and still operate without a European license? The answer is simple – go for the regulation elsewhere.

Even though EU regulation has been quite easy to get for many of the brokers and was also perceived as one of the best for the trader’s perspective, there are still other legitimate countries that can offer a solid regulatory framework. One of such countries is Australia, the license issued by ASIC is actually quite well known by many FX traders and, currently, Australia has not been trying to close its binary brokers. Countries like Australia can certainly be a great option for binary brokers that are looking for regulation outside of EU.