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Tech companies Apple and Google have been forced to take down over 300 apps offering binary trading options from their online stores post-intervention by Australian Securities and Investments Commission (ASIC) after many cases of fraud were reported, as per a report in Bloomberg.
The decision comes after numerous cases of fraud involving unlicensed operators of apps who encourage consumers to make bets on whether instruments like shares or currencies will rise and fall have been reported.
ASIC mentioned cases where consumers made winning trades 9 out of 10 times in the demo and then lost everything in the live trade. Several other instances of people being unable to withdraw cash from their bank accounts were also reported.
A whopping 80 percent of the 330 removed apps had no warning about risks inherent in trading.
What is binary trading?
Mobile trading is becoming increasingly popular and binary options app are quickly becoming the preferred access point for active investors.
As per Investopedia, binary option, or an asset-or-nothing option, is a type of option where the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money.
Investors find it attractive as they chiefly have to only guess whether something specific will happen or not.
Of late, there has been a surge in unlicensed products beyond the reach of regulators that make “outrageous claims” as per a statement by Greg Yanco, head of market integrity at ASIC.
Apple has reportedly updated its developer guidelines prohibiting all new apps that facilitate binary options trading.
An Australia-based spokesman for Google also gave out a statement saying that they delete apps that violate their policies refusing to comment on individual ones.
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