OptionBit has substantially reduced its workforce in the European Union, sources with knowledge of the matter shared with Finance Magnates. The news comes after the introduction of stricter regulation of the binary options brokerages regulated by the Cyprus Securities and Exchange Commission (CySEC).
The binary options broker targets clients from all over the world and the cost optimization effort is likely to mainly affect the company’s operations that service European clients.
Cost optimization has been a major theme in the binary options industry since last year. The banning of deposit bonus practices by CySEC has substantially contributed to the downsizing of the financial betting side of the retail market.
OptionBit was one of the first brokerages in the industry, maintaining client relationships all over the world. The company’s European business is supervised by CySEC. The brokerage is operated by Cyprus Investment Firm Novox Capital Ltd.
Finance Magnates reached out to the company’s management, which declined to comment.
2020 Global Market Outlook: How the “Known Unknowns” Can Affect CurrenciesGo to article >>
Binary Options Industry Shift to Continue
While regulated binary options brokerages are continuing to cut their staff and optimize costs, the number of unregulated companies has been increasing rapidly. In the meantime one of the longest-running operators, CySEC regulated Banc de Binary, recently closed its doors.
Last year’s changes to the regulatory framework in Europe have put pressure on regulated brokers to revamp their product offerings. Not only were bonus deposit promotions removed, but tech providers have had to invest massively in new technology in order to stay compliant with newly minted regulations.
The binary options industry is continuing on its consolidation path with revenues in the industry being severely affected by the decreased efficiency of marketing campaigns.
With brokers heavily relying on the sign-up deposit bonus to attract clients, the new regulations have not only banned similar practices, but also hot sales over the phone.
Binary options brokers in Israel have been facing increased scrutiny from the government that is aiming to curtail the illicit activities of a number of firms from the industry.