Banc De Binary

» see bancdebinary.com as it lived, on the wayback machine

~ the eulogy ~

A binary option is a bet with a timer on it. You pick an asset, you say whether the price will be above or below some level at a stated moment, and when the moment passes you are either paid a fixed amount or you have lost what you put in. The Better Business Bureau gave the firm an F in October 2013 and described the site in its report as a place that essentially allows investors to gamble on the future price of something at a point in time.

Banc De Binary was the loudest name in that trade. Its founder, Oren Laurent, said the company started on 15 January 2009, although one of its own advertisements claimed a 2008 founding in the Seychelles. The structure was spread across several entities: Banc De Binary Ltd in Cyprus, with sister entities in Israel and the Seychelles, all trading internationally under the one brand. By June 2011 Laurent was claiming around 20,000 client accounts. In a 2014 court filing the firm described itself as small, with about sixty employees, and that same year its revenue was reported at $100 million.

It got properly licensed on 7 January 2013, when the Cyprus Securities and Exchange Commission authorized it as an investment firm, and from late February it appeared on the UK Financial Conduct Authority's register as a CySEC firm with limited FCA oversight. Under the European passporting rules that license carried it into almost every member state of the EEA. What came after it was a history of regulatory trouble on three continents.

~ the dossier ~

~ the addresses ~

The firm told American customers it had an office in New York, at Trump Tower, and told British customers it had one in the City of London at 1 King Street. Both turned out to be virtual office space with nobody in them, and its own UK Companies House filing said the business was in Cyprus. The trading platform came from somewhere else too. It was built by SpotOption, an Israeli company that supplied the software to much of the industry and set the option prices on it, and one Banc De Binary advertisement said Laurent had been a founder of SpotOption. By the firm's own marketing, the house that took the bet and the house that priced it were connected.

~ nevada ~

On 6 June 2013 the Commodity Futures Trading Commission and the Securities and Exchange Commission both charged the company with violating American financial law. The SEC won a preliminary injunction in the District of Nevada on 30 July to stop it trading with US customers, and charges filed a week later said the firm might be criminally liable under the RICO statute. Among the SEC's allegations was that it had opened accounts for people with almost nothing, including one unemployed person with less than $1,000.

Banc De Binary's public response did not mention any of this. It announced that it was voluntarily discontinuing its operations in the United States and was in discussions with the regulators, which left out the injunction that had already stopped it. The case ended on 26 January 2016 with a court order to pay $11 million in restitution and penalties, with refunds to American customers supervised by the National Futures Association as court-appointed monitor. The same order barred the firm permanently from doing any business with US persons.

~ the football ~

Four months before that settlement, on 7 September 2015, Liverpool FC announced a one-year partnership making Banc De Binary its official binary options partner in Europe and in three markets outside it. Neither side disclosed the money; the trade press estimated around £1.5 million. The club threw in digital marketing support and appearances by players and former players at company events. Southampton signed a similar deal and later dropped it after a campaign by a financial news site.

I never opened an account with any of these firms. The ads found me anyway, for about three years, in the sidebars and the pre-roll of a Turkish internet that had no particular opinion about who was buying the inventory. Being seen was the whole purpose of the Liverpool deal, and it worked on me: I knew the name long before I knew what the company actually did with it.

~ still open for business ~

In January 2017 BuzzFeed traced the Hawking code scam, which ran on a fake CNN page and an invented interview about an algorithm Stephen Hawking had supposedly built to move money from the richest 0.1 percent to everybody else, back to Option.fm, a brand associated with Banc De Binary. Cambridge denied any connection on Hawking's behalf. On 9 January a company official said Banc De Binary was closing, because it was just not worth the tarnished reputation and he could not see how they could keep operating under that scrutiny. The CySEC license was surrendered. Reuters went to the headquarters and found the name taken off the building and a sign in the window advertising it for rent.

bancdebinary.com still answers. No parking page, and no stranger's business sitting on the name: it is the firm's own site, frozen, with a footer reading 2012 Banc de Binary and an About Us page still promising that this year we aim to be the first ever regulated binary options brokerage. Seven buttons on the front page say Open An Account. They point at bbinary.com, which has stopped accepting anything. The company has been dead for nine years and its best salesman is still working.

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