As you probably know, ESMA has temporarily banned the marketing and sales of binary options in the European Union. Does it mean that you, as a retail trader, are not allowed to get involved with smart options, or, in other words, can I trade binary options in Europe? Yes, you can, here is why and how.
ESMA binary options ban in the EU: banning the companies, not the traders
The language used by regulators can be technical, especially for the people whose mother tongue is not English, but it is clear: EU retail traders are not forbidden to trade binary options. Rather, it’s the brokers based in Europe that are forbidden to send and promote digital options in the European Union. Concretely, it means that if you are a retail trader, you can legally trade binary options using the services of a platform based outside of the EU, what is commonly referred to as offshore brokers.
As we have discussed already in another post regarding binary options ban in Canada, that’s why this temporary ban is counterproductive, as it pushes traders towards the riskiest fringe of binary brokers.
Furthermore, reports show that even CYSEC regulated brokers found workarounds, such as asking anybody based in the EU to tick a box stating they are a professional trader to let them register. In that case they can be accepted. Of course it is quite hard to define who is a professional or a retail trader. Brokers can play on that grey area, but they shouldn’t be blamed as ESMA has created this counterproductive legal framework.
Where to trade binary options in the European Union?
Choosing your binary options broker is even more difficult now, as the CYSEC license guarantee, despite its flaws, do not even exist anymore. The solution seems obvious, you have to choose a platform that guarantees funds security and fairness by design, and until now only one provide this, Spectre (click on the following link to read our Spectre.ai review).
Hopefully the ESMA ban will be lifted, leading the European securities and markets authority to work on a genuine solution aiming at really protecting European consumers while punishing the rogue actors perpetrating binary options scams.