The Monetary Authority of Singapore (MAS) today issued a warning to investors in the country regarding trading of binary options with unregulated platforms. The regulator says this comes in the wake of an increase in the number of complaints from people who have suffered financial losses from such investments.
They explain that unregulated platform providers often use marketing catchphrases such as “trading with zero risk”, “trading amounts of as little as $1”, and “profit payout of 500% per trade”, to entice investors. However, contrary to promises of low investment risks with exceptionally high returns, binary options are in fact speculative and risky investment instruments.
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The warning goes further and claims there is a high chance of the investor losing his entire investment amount, whether he deals with a regulated or unregulated entity. “An investor is always exposed to investment risk, whether a product is regulated or not.”
Additionally, many unregulated binary options trading platforms are fraudulent and based outside Singapore, according to the MAS. “Investors who choose to trade with these platforms are unlikely to recover any losses.”
Singaporeans should know that if they choose to deal with unregulated entities, they will not have access to avenues for dispute resolution offered by the MAS should a dispute later arise. The regulator calls on investors to check if the entities offering the products they are dealing with are regulated by the MAS before opening an account.