Banc de Binary, a Cyprus-regulated binary options broker agreed to pay $11 million in settlements to the US regulator Commodity Futures Trading Commission (CFTC), reports the Wall Street Journal. The agreement comes after the broker was sued in 2013 by the CFTC and the Securities and Exchange Commission (SEC) for allegedly circumventing the US ban on on off-exchange binary option contracts and illegally signing up American customers on its trading platform.
Under the settlement, which was accepted by the US regulating authorities, Banc de Binary will pay $7.1 million in disgorgement and restitution, $2 million to the CFTC and $1.95 million to SEC in civil penalties. The founder of Bank de Binary, Oren Laurent, will put in $150 000 from his own money as part of the settlement. A little over $9 million from the entire sum of $11 million will be used to repay the damages done to US customers of the platform.
According to the authorities, Banc de Binary has used a virtual office in the Trump Tower in New York and in the period between 2011 and 2013 took net deposits of $11 million from 6614 US customers.
This is the second significant sum the binary options broker has to pay this year, after in January the Cyprus Securities and Exchange Commission (CySEC) fined it EUR 350 000 for failing to comply with the requirements for authorization and inform its clients about its services, risks, costs and charges that may occur.
Banc De Binary is the trading name of Belize-registered BDB Services. The financial regulatory bodies of Australia and New Zealand have issued warning notices against the broker for operating in the two countries without authorization. The broker offers binary option trading services of more than offer 200 tradable assets, such as forex, stocks, commodities, and indices to retail and institutional customers.