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Binary options regulation in 2018

The year of 2017 has been quite bad for the whole binary options industry. This has led many brokers to add FX and CFD trading instruments to their offers (like IQ Option) or even completely abandon binaries and offer only currency and CFD trading services (like 24option). The main reason behind such drastic changes is rather simple – European and Israeli regulations.

Most of the binary market was located in the above-mentioned countries. While the story with Israel is quite simple, the country hosted a bunch of unregulated and regulated brokerages, which were then prohibited by the local authorities, changes are mostly driven by the European Banking Authority. Long story short, European Union does not want binaries to be offered at all, or at least by the companies that are regulated by the European bodies.

Now it is time to take a look at the possible scenarios of the binary options regulation in the coming year and see if we could still buy our call and put options with trusted companies.

Best examples come from gambling

Unlike financial trading, online gambling has been around for much longer. And most of the updates in the financial regulation (especially in terms of online businesses) have already taken place in iGaming sector previously.

Throughout the history, European gambling regulators were not allowing any online companies to apply for the license. Such a practice received a name of the grey area, a situation where one operates without a license simply because he is unable to apply for one. In late 2016 and early 2017, many European countries (like Poland and the Czech Republic) have allowed gambling companies to file an application for the license, yet the conditions for getting one are so harsh that most of the companies decided to simply abandon these markets. This gave birth to various online bitcoin casinos, companies that can accept the payments anonymously and cannot be blocked by the various credit card processing companies. While many may assume that players would opt in for regulated online casinos, for one simple reason – these companies make much better money, hence they can provide much better support services, a wider scope of games or just fatter bonuses.

Hence, one of the obvious conclusions which we can draw here is that some binary options brokers will completely avoid European regulations and will simply switch to accepting only payments in the bitcoin or other cryptocurrencies.

How about actual regulation?

Well, going fully unregulated is certainly an option. Binary brokers like this have been around for years, yet it is quite possible that within 2018 they will be blocked by all of the major payment processing companies. So how one can avoid being blocked by the payment processors and still operate without a European license? The answer is simple – go for the regulation elsewhere.

Even though EU regulation has been quite easy to get for many of the brokers and was also perceived as one of the best for the trader’s perspective, there are still other legitimate countries that can offer a solid regulatory framework. One of such countries is Australia, the license issued by is actually quite well known by many FX traders and, currently, Australia has not been trying to close its binary brokers. Countries like Australia can certainly be a great option for binary brokers that are looking for regulation outside of EU.


Why isn’t binary trading popular in Norway?

As the binary options industry is sweeping over the world and signing up millions of clients, some regions still remain largely untouched. Norway is one of these few regions, and there are several contributing reasons:

Social attitudes

binary trading popular in NorwayBinary options trading is viewed as gambling by most people. Indeed in some ways it is, but the general structure is quite different, which is why it is often considered to be a financial instrument. Nevertheless, many countries do not recognize it as such, and it remains either unregulated or licensed by non-financial bodies.

In the UK, for example, the Financial Conduct Authority (FCA) does not recognize binary options as a security or financial instrument. Hence, binary options brokers in the UK are governed and licensed by the Gambling Commission. However, the US does recognize binary options as a viable financial instrument, which is why the trade is licensed and overseen by the Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). The Cyprus Securities and Exchange Commission (CySEC) also acknowledges binary options, and provides licenses to numerous brokers.

Nevertheless, the activity remains unregulated in most areas of the world where there is no law directly concerning binary options, and these include Norway. The Financial Supervisory Authority of Norway (Finanstilsynet) does not have any authority over binary options, thus there’s no regulation over it.

Despite this, according to , Norwegians still practice binary options trading through brokers situated in other European countries, but only to a small extent because of the social attitude regarding gambling. Binary options are also called all-or-nothing options, giving them more of a gambling nature than an investment. In Norway, the people do not like gambling and most Norwegians see it as a social ill. This can be demonstrated by the residents’ reluctance to pressure their government to change the existing laws on gambling. Surveys also show that even though gambling still goes on, Norwegians would prefer if the government imposed tougher laws to limit how much it goes on.

All these show that there is an underlying distaste for gambling, and the association of binary options with gambling transfers the same attitude Norwegians have over gambling. In other parts of Europe, binary options trading has grown because of marketing tactics that glorify binary options trading through images of rich young people who claim to have made their money from the trade. In Norway, though, social good rather than personal riches and wealth are glorified, so this same marketing gimmick has not had an impact.

In short, there are different social attitudes in Norway that have worked together to keep binary options unpopular in Norway.

Financial regulation

does not recognize or regulate binary options trading. This means that there are no binary options licenced by the financial regulator and all the trading of binary options that still occurs is done through offshore companies. The trading of binary options in Norway is therefore illegal in the eyes of the law.

However, other similar crimes still go on such as the online gambling that is done through offshore gambling companies, because there has never been prosecution for these crimes. In spite of this, the idea that something is illegal is enough to deter most Norwegians from binary options trading. Furthermore, any proceeds from binary options trading are taxable, and at the high rate of 30%, which is more than many other European countries.

These factors on the legal and regulatory side also contribute to the unpopularity of binary options trading in Norway.


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