Canadian Consumer Commission Weary of Binary Options, Bitcoin

Canadian financial services watchdog in New Brunswick has issued a note to investors warning them about possible investment scams. Binary

images (1)A consumer protection authority in the eastern part of Canada has issued a note on its website warning users about possible investment threats. The Financial and Consumer Services Commission (FCNB) noted that it had identified emerging threats facing investors in 2015, including schemes involving binary options, marijuana-related businesses, stream-of-income investments and digital currency. The move comes as Canada’s main financial regulator continues its onslaught against binary options and non-regulated brokers.

The watchdog published the note on its website with details of the threats. The news comes on the back of a report conducted by the Enforcement Section of the North American Securities Administrators Association (NASAA) mentioning a total of four approaches.

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Jake van der Laan, director of enforcement with the FCNB, commented about the notice. He said, “Many of the emerging threats facing investors involve classic schemes adapted to new products.

“We are seeing classic ways of scamming people being very quickly adapted to emerging trends, largely as a result of the Internet.”

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Regulators are concerned that vulnerable investors may be duped by fraudsters who sell lucrative investments under the banner of new technology products. In the note, the regulator outlines four emerging threats, including binary options, marijuana-related businesses, stream-of-income investments and digital currency.

Binary options and virtual currencies are believed to be the new in-thing for providers operating in the $5.3 trillion a day FX markets. Firms looking to target Canada are facing an uphill battle as the regulators continue to place burdens on firms offering financial derivatives products to Canadian traders.

Binary options are financial derivatives products that are regulated in Europe and the United States. Recently, US-regulated Binary Options exchange reported that it will be launching on-exchange bitcoins.

Digital currencies are contract-based products that are gaining traction as they increase their popularity among investors. Although the currency is not backed by a central bank or physical instrument, Canada’s deputy governor at the central bank commented about digital currencies and the possibility of recognition by authorities.

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