The now-defunct binary-options brand Binary International and its principal Curtis Dalton of Middleton, Massachusetts, have been hit with a $200,000 fine for violating trading regulations in the United States.
The Commodity Futures Trading Commission (CFTC) today announced the final settlement, which in addition to the monetary penalty prohibits Dalton from ever trading, soliciting or accepting funds from others for the purpose of trading commodities.
Binary International is no longer doing business via the internet, at least not while using the names under which it has been sanctioned and banned.
The detailed complaint alleges that the scheme has been going on since at least 2016, and involved trading binary options on FX pairs through a platform operated by an unregistered British Virgin Islands company located in Cyprus.
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Registration is no guarantee against fraud
Because Dalton and his affiliated company were not registered in the United States as a designated contract market, exempt board of trade, or bona fide foreign board of trade, the court’s order states, the binary-options deals they proposed “constituted unlawful off-exchange options.”
According to the watchdog, many of these foreign entities are acting in a capacity requiring them to be registered with the CFTC. Registration allows the agency to provide greater security and oversight of the industry by examining whether firms meet minimum financial standards as well as disclosure, reporting, and recordkeeping requirements.
However, the press release emphasized that registration is no guarantee against fraud or mismanagement by an unethical firm, although it does help bring a higher level of security and accountability to the industry.
Director of Enforcement James McDonald commented: “The requirement that these contracts be offered by registered entities on a bona fide exchange is part of the CFTC’s comprehensive regulatory regime to protect the public from unscrupulous trading outfits. We remind customers that they should do their homework on any firm they intend to use to trade in our markets.”