CFTC Identifies Unregistered Foreign Entities Accused of Binary Options, Forex Trading Solicitations

The CFTC added 21 names to its list of foreign entities that are not registered with the CFTC. These entities are suspected of soliciting and accepting funds from U.S. retail investors for trading in binary options or foreign currency.

The so-called "Registration Deficient List" ("RED List") was first published in 2015 as a means to help protect investors from fraud. The RED List now consists of 125 names of unregistered foreign entities.

In addition, the CFTC issued a Consumer Alert cautioning investors about fraud involving binary options and their trading platforms. The CFTC explained that binary options are contracts in which the outcome is entirely based upon the results of a "yes/no" proposition. The CFTC warned that internet-based binary options trading platforms may overstate average returns on investment despite structures that are unfavorable to customers. Such internet platforms are also potential vessels for identity theft and manipulation of trading software schemes.