The Financial Sector and Conduct Authority recently released an announcement depicting Binary Rise Fall as a fraudulent company that is accepting people’s funds through a false money management scheme.
In exact words, the FSCA warned the populace that the company is not regulated or authorized by the entity to conduct financial services of any caliber and therefore should be considered as fraudulent or dangerous to anybody already involved with the brand.
The company itself has not answered these allegations so far, but considering the history of FSCA warnings, it is very likely that it will simply disappear never to be heard of again.
A history of fraud in South Africa
This is not the first and most definitely not the last financial scam that South Africans will have to overcome. The country has been ripe with such fraudulent activities for one simple reason. South Africans fall for it.
Now, this doesn’t mean that locals are just easy targets, it just means that they are easier compared to other countries due to a very strong investment culture for residents of Cape Town and Johannesburg.
In the last decade or so, South Africa has been bulking up with independent as well as professional traders for every single asset. Stock traders, FX traders, and even cryptocurrency traders usually hail from South Africa nowadays. This was mostly due to a very well-connected community in its major and small cities alike.
Here’s how it would go down. Hundreds of young traders would enter the market due to a newborn interest from a single community. Even if at least one of them managed to succeed in this regard, they would immediately become an example for other people in their community, thus inspiring everybody to start trading as well.
It also helped that there were already a lot of people who would trade with forex brokers in South Africa as well. Pair that up with the availability of dozens of different investment companies be they forex or stocks focused and we have ourselves a self-sufficient demand/supply system for investments.
How did binaries slip through though?
Although these types of news articles are quite common in South Africa, this one is particularly interesting. Why? Because binary options have been universally deemed as one of the worst assets to trade due to the business plan composition of service providers as well as the very “gambling-esque” style of the assets themselves.
In almost every single country in the world, should anybody dare and offer binary options trading services they are by default marked as a fraudulent company, but for some reason, people still fall for them.
In South Africa as well, the Financial Sector Conduct Authority has said many times that they do not support or condone the trade of Binary Options as the difference in interest is too large for the service provider and the client.
The composition is that the more the customer loses the more the company itself gains. Therefore, the company could deliberately partake in making sure the customer loses, thus violating the most important guidelines of any financial regulation.
These scams are not as dangerous
Fortunately for most, especially the regulator themselves, these types of scams are usually not as large scale as they could be. This is due to years of info distribution about the dangers of binary options. Therefore, much fewer people actually register with these companies.
However, a scam company offering FX, stocks, or crypto services is a completely different story. It is much easier to masquerade as a legitimate company when you’re actually offering legitimate assets, but it’s impossible to keep it up for long.
That is why most completely new brands tend to be a re-brand of previously flagged entities trying to re-enter the market.
Thankfully though, there are dozens of financial regulators like the FSCA constantly monitoring the markets for such companies.
In fact, anybody can support the regulator by directly submitting information about a company you think might be fraudulent.
FSCA recommendations
The good news is that the FSCA has some guidelines that you can use to make sure you’re staying safe.
Here’s what you can do.
Find if the company has some kind of information displayed on its website regarding a license. If they have then make sure to search up their name as well as their license # on the official FSCA website.
However, even if you find some results, make sure to contact the FSCA directly as the license may have been expired or the company may be a “clone” as they like to call it.
A clone is basically a fraudulent company assuming another one’s name and posing as the real thing. The FSCA will send you the official website of the real company which you can compare with the one you’ve been visiting.
That’s pretty much it. If the company has a legitimate license it means it’s safe to trade with them, but if they don’t then it’s best to stay away from them or report them outright.
Frequently Asked Questions
Are binary options a good asset to trade?
It is seen as one of the worst assets to trade.
Is Binary Rise Fall legal in South Africa?
Refer to the warning by the FSCA about Binary Rise Fall
What is the trading platform for Binary Rise Fall?
SpotOption
What is the minimum deposit for Binary Rise Fall?
$5
Does Binary Rise Fall offer a demo account?
Yes.
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