On November 11th, 2013, iOption blocked access to new traders, and informed affiliates and sales personnel that the company is going out of business.
This drastic decision is the last chapter of an ongoing attempt to sell the company due to its insolvency and the inability of ownership to find new investors. Rumors surfaced in the binary market during the last few days about a possible buy-out by a major rival broker or Forex firm. Yet any talks that might have been attempted were not fruitful and ultimately iOption closed its doors and is expected to file for bankruptcy. Here is a FAQ for iOption clients and traders, which are confused and worried about this new situation.
The information on this page is not a professional legal opinion and you should not use it as such. We strongly suggest that if the amount of money you have in your iOption account is large, that you contact a lawyer and receive appropriate counselling.
I am an iOption client, what should i do?
Unfortunately, the perspective of receiving back funds deposited with iOption is grim. iOption was not a regulated binary options broker, and therefore your investment was not adequately protected. Try opening an account with Banc de Binary, the company that nowadays offers the best guarantees and is deemed safest among all binary brokers.
How can iOption traders receive their money back?
Your best chance of receiving any of your investment is aiming your efforts at SpotOption. iOption is a white label firm, that uses the SpotOption platform to operate. In reality, when executing trades, you are in fact using the SpotOption infrastructure, and therefore there is a case to be made that SpotOption is responsible for your monies. SpotOption is fully regulated by CySec laws so your chances to receive some compensation are greater.
I am iOption client, is my investment safe?
No, sadly the money you deposited or earned while trading with iOption is not safeguarded. If iOption is insolvent, and currently that is the case, it will be unable to pay back your money. Since iOption wasn’t regulated, the “money” traded on the platform was virtual, and there was no supervision of any sort assuring that the amount of money traded was being guaranteed by regulated bank accounts, that would not be accessible to the broker.
Regulatory laws and impositions work more or less thus: the company has to deposit a certain value in a bank account that is managed by the regulatory body, for example, the Cyprus Securities Commission. The deposits of clients are sent directly to that account. The binary broker itself receives only the commission and/or the earnings it is due. This guarantees that the monies of all traders is safe.
What happens to my money if iOption files for bankruptcy?
The bankruptcy procedure is meant to protect iOption from the larger values it owns affiliates and online media companies. Since not paying employees can be a crime punishable with jail time, it is most probable that any residual monies that become available by selling iOption assets, for example, will be used to pay the employees, which it is rumored have not seen salaries for months. The bankruptcy will have little effect on clients and will not be helpful to you.
What happened to iOption can happen to any broker?
No. As explained above, binary corporations that are properly regulated are safe. Therefore we suggest you shift your trading activities to Banc de Binary. Hopefully you can regain the money lost to iOPtion
Is investing with binary options brokers safe?
Remember that binary options trading involves risk, since this is a volatile financial derivative. The risks involved in binary trading are totally unrelated to the unfortunate outcome of the iOption situation. Any investment offering such high yields also involves high levels of risk.
That being said, the situation faced by iOption affects a large amount of brokers. Therefore, choosing reliable brokers is a key to insure that your investment is safe.
Besides iOption, which other binary brokers are facing financial difficulties?
Most binary options brokers are not solvent or profitable companies. These firms recruit money from banks and investors with the hope of becoming profitable in the long run. That is why you should always make sure the broker you select is regulated, and even then, understand the different types of guarantees available. Because among those few which do offer a guarantee in the form of a license and regulation, most are white label companies.
Even regulated binary options brokers cannot fully guarantee your investment, unless the broker has a privately owned trading platform and is not a white label. Currently, there are only two such corporations in the market: Banc de Binary and Anyoption.
The advantage with Banc de Binary is that it is also licensed to work in the USA, where it is quoted on the Nasdaq OTCBB, while Anyoption cannot accept American traders at all.
Where can I get more information about the iOption bankruptcy?
We will be updating and following the iOption problem closely, so make sure to visit this page again. This way you will be informed of all the latest developments involving the iOption shut-down.