The Cyprus Securities and Exchange Commission has just suspended the operating license of OptionRally. The binary options brokerage, which at one point announced a deal to sponsor Formula 1 team Ferrari, is facing substantial operational difficulties.
The reason for the suspension of OptionRally’s license is the company’s possible non-compliance with client fund protection rules. According to CySEC’s communique, the company also might have been undercapitalized under the criteria set out in Cypriot law.
CySEC outlines in its announcement that the company is mandated to get its house in order within one week.
OptionRally has been showing weakness in recent months as the company laid off a number of employees at the end of last year. The company was also already fined by CySEC over misleading marketing materials on its website.
Binary Options Hammered Once Again
CySEC’s announcement is yet another blow to the regulated binary options industry. Several regulated brokers have been fined and a number of companies have been booted from the industry either by their own dismal reputation or by the growing negative reputation of the product.
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According to CySEC, OptionRally might have never been in compliance in the law, with the announcement outlining “possible non compliance, at all times”. Both client fund protection and capital requirements may have been violated.
At present, CySEC regulated subsidiary OptionRally (www.optionrally.eu) is not allowed to operate in any capacity. The company’s website states that the license of the firm is suspended until the 20th of July.
OptionRally.com Still Operational
CySEC’s decision does not affect the global website of the brokerage (www.optionrally.com), which is owned by an entity called TCM Investments. The website is fully operational and purports to be regulated in Belize. There are no announcements that would lead one to think that the site is facing any operational difficulties.
The global website of OptionRally purports to be operating under the jurisdiction of the Belize International Financial Services Commission (IFSC). If that is the case, apparently there has been lack of coordination between the Cypriot and Belizean authorities on this matter.
The suspension of OptionRally’s license is dated today (13th of July, 2017). Finance Magnates has reached out to OptionRally for a comment, but at the time of publication has not received an official response from the management.