Beware! BitsOptions is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
BitsOptions claims to be “one of the leading binary options brokers in the industry”, based and regulated in the US. But scrutiny quickly shows that the BitsOptions is actually a prime example of why binary options trading is now banned by a number of financial regulators. It is a poorly disguised fraud scheme designed to take advantage of naive people looking for an easy profit.
BITSOPTIONS REGULATION AND SAFETY OF FUNDS
Binary options are financial options that come with one of two payoff options if the contract is held until expiration: a fixed amount or nothing, depending on whether the trader has guessed whether the price of a certain asset will be below or above a certain level at a certain time.
This is a very simple way to trade the financial markets, but it is this simplicity that makes it prone to scams and exploits. Binary options trading is banned in a number of major markets such as the EU, the UK and Australia. In the US, this trading is still legal but can only be done through the small number of regulated U.S. exchanges, known as Designated Contract Markets (DCMs).
BitsOptions claims that it is operated by a company named BitsOptions Limited, which is best in the US. The falsity of this claim becomes immediately obvious because BitsOptions claims to be licensed and regulated by a non-existent institution – “International Financial Services Commission of Tennessee”:
To operate as a broker in the United States, a company must be registered by the Commodity Futures Trading Commission (CFTC) and to be a member of the National Futures Association (NFA). There is no BitsOptions Limited in the register of NFA:
BitsOptions is obviously lying about being a registered and regulated broker. But there are many more obvious irregularities with the website. Despite presenting itself as a binary options broker, the website has a whole section on forex and CFD trading. Links to the Terms and Conditions lead either to a generic Privacy Policy or to a blank page.
If you have decided to trade on the financial markets, you need to make sure that the broker you have chosen is legitimate and indeed licensed by a regulatory institution such as CFTC, UK’s Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC) or Australian Securities and Exchanges Commission (ASIC).
Clients of these brokers receive protections such as negative balance protection and segregation of the client’s funds from the broker’s funds. In the EU and the UK, brokers must also participate in guarantee schemes that cover a certain amount of the trader’s investment if the broker becomes insolvent. These guarantees amount to up to 20 000 EUR in the EU and 85 000 GBP in the UK. However, the likelihood of such a bankruptcy is low because regulators also have significant net capital requirements that companies must maintain – EUR 730 000 in UK and Cyprus, AUD 1000 000 in Australia and at least 20 million USD in the United States.
BITSOPTIONS TRADING SOFTWARE
One place on the website mentions the MetaTrader 4 (MT4) platform, and another – a custom platform illustrated with images of a web trader that is definitely not MT4. These and other inconsistencies suggest that the website was hastily assembled, probably using ready-made elements from other websites of the same scammers.
After registering an account, it becomes clear that BitsOptions has no trading platform at all. In the customer area there is only a “practise trade room” that doesn’t even load properly:
In it, one can “practice” binary options trading on three assets – Gazprom and Apple shares and the currency pair EUR/USD. It is hardly a coincidence that an identical selection of assets can be seen at a number of the bogus brokers we have reviewed.
Legitimate brokers offer clients a wide selection of trading software, including desktop, mobile apps and web-based platforms. The most widely used platforms in the industry are MetaTrader 4 (MT4) and MetaTrader 5 (MT5). These platforms have established themselves as industry standard because they offer a wide range of features, including a variety of options for customization, multiple account usage, designing and implementing custom scripts for automated trading and backtesting trade strategies.
BITSOPTIONS TRADING CONDITIONS
The BitsOptions website describes three account types – Basic, Intermediate and Professional. The minimum deposit is 500 USD. By comparison, with as little as 100 USD or even less you can open a micro account with many legitimate, regulated brokers.
BitsOptions promises payout of 81% on binary options contracts, which is presented as the “most generous payouts in the industry”. Actually such levels are typical for those financial instruments. But those values have no real meaning because BitsOptions is not a real broker.
BITSOPTIONS DEPOSIT/WITHDRAW METHODS AND FEES
On the main page of the website you can see the logos of some popular payment methods such as bank transfer, Western Union, MoneyGram and PerfectMoney. However, only two options are visible in the deposit menu itself – Bitcoin and Ethereum cryptocurrencies. The minimum amount that can be deposited is the equivalent of 100 USD:
Scammers prefer cryptocurrencies because these transactions are not subject to refunds. If you are interested in licensed brokers that accept cryptocurrencies as a means of payment, take a look at this list.
BitsOptions does not provide any other information about fees and conditions. But there is no doubt that you should not trust your money to BitsOptions.
HOW DOES THE SCAM WORK
Many people are looking for ways to make money passively, but do not have the necessary knowledge to invest in the financial markets themselves. This makes them a target for the many online scammers posing as brokers. If you come across some of them and give them your contacts, you will be contacted by skilled scam artists who will assure you that they can take on the incomprehensible aspects of investing for you. You will only be required to invest and take profits.
But when you try to collect even just a fraction of your money, it will turn out to be impossible. Your supposed profits will suddenly evaporate, or you’ll find that you have to meet impossible traded volume requirements first. Fraudsters often insert huge withdrawal fees into client agreements amounting to 10%, 20% or even more. You won’t be able to hold scammers accountable because they hide behind fake names and shell-companies offshore. Scammers also typically use non-refundable payment methods.
WHAT TO DO WHEN SCAMMED
First of all, you should be very careful not to fall straight into the clutches of other scammers. Another common scam is to promise money recoveries from fake brokers for an upfront fee.
If you used a credit or debit card for the transactions, you can charge a chargeback. Visa and MasterCard have a long period in which they allow such requests – 540 days. But keep in mind that fraudsters can dispute if you have provided them with a copy of your ID and proof of address. It would also be helpful if you alerted the authorities in your country and other people online to the activities of the scammers.
