CySEC, a Cyprus financial regulator, has announced that CySEC has suspended OptionRally’s CIF license. The news is a major hit for OptionRally who will no longer be able to offer binary options trading on their platform.
The suspension is not a lenient one allowing OptionRally only one week wherein the company must take action to comply with CySEC’s demands. CySEC states that the company’s main issues include protecting the funds of their clients, the company’s capital adequacy ratio and protecting the company’s own funds.
OptionRally is not allowed to take on new clients, advertise as an investment services provider or execute orders while their license remains suspended.
The company is also legally required to post that they have had their CIF license suspended on all of their website properties. OptionRally has been the target of regulators in recent months recently losing its IFSC license in Belize. The loss of the license came in early May.
OptionRally currently operates the optionrally.com and optionrally.eu domain names.
CySEC’s stance on license losses has toughened in recent months previously offering companies 30 days to correct problems.
OptionRally’s troubles started to come to light several months ago when the company started to lay off several employees. The company was also previously fined by CySEC due to misleading marketing materials on the company’s website.
CySEC found that OptionRally may have never been compliant with the law and notes “possible noncompliance, at all times” as a main reason for the company losing their license. The company didn’t maintain proper capital requirements set forth under CySEC nor did they provide fund protection required for all clients.
Optionrally.eu currently states that the company’s license is suspended until July 20. The loss of license does not impact the company’s global website. Binary trading under the company’s global website falls under the regulations of IFSC. There is no word from CySEC on whether or not continuing to offer services on the global website is allowed at this time.
Previous reports suggest that the company also engaged in fraudulent activity not allowing clients to withdraw their money. The company was also sued by Turkish regulators in 2012 because they continued to solicit local clients without first obtaining the required local license.
Several companies switched to binary options at the time under the assumption that the Capital Markets Board (CMB) was targeting only forex brokers.
OptionRally has not reached out to requests to comment on their most recent license suspension.
