The demise of a once popular binary options broker, namely iOption has been formalized recently via three separate announcements which were issued in the past few days by the Cypriot regulator, the Cyprus Securities and Exchange Commission. Having reported repeatedly in the past on what we called the iOption saga, let us see how these announcements by the regulator place the last nails on its coffin.
The first development came in the form of an announcement published by CySEC on 7th January, through which it informs the public and investors in particular that the company ‘iOption Global Group 2012 Ltd’, which trades via www.ioption.com, not only is not regulated by CySEC, but is also not permitted to provide investment and ancillary services in the Republic of Cyprus, pursuant to the country’s Investment Services and Activities and Regulated Markets Law, because it has never been authorized by CySEC. Moreover, due to the fact that this particular company is not a bank or a cooperative firm, established in the Republic of Cyprus and thus authorised to provide such services. Moreover, in relation to this company, CySEC points out that no notification has been received by a competent authority of another EU Member State, pursuant to sections 77 and 80 of the above mentioned Law.
Through this announcement, CySEC washed its hands off the www.ioption.com site, clarifying that this particular brand name was never regulated by them. On the same date, i.e. on 7th January 2014, CySEC issued another announcement in order to publicize a decision taken on 30th December 2013, by the Cyprus Investment Firm (CIF) under the name «Scorpid Trading Ltd». According to the CySEC announcement, Scorpid, which had been providing investment services via the domains www.ioptoneu.com and www.easyinvest.eu, “renounced its authorization pursuant to section 24(1)(b) of the Investment Services and Activities and Regulated Markets Law of 2007, as in force.” Therefore, the CySEC announcement goes on to state “the authorization with Νumber 218/13 lapsed as from the abovementioned date.” It is reminded that Scorpid, the parent company of iOption, received its CIF license and obtained the status of an EU-regulated binary options broker at the end of October 2013, only days before its sudden collapse in early November.
Interestingly enough, the CySEC announcement concludes by mentioning that Scorpid informed the regulator that it has “settled all its obligations arising from the investment services provided via the domains www.ioptoneu.com and www.easyinvest.eu or/and activities that are terminated.”
However, this was not the end of the story, because as almost always in real life, there is little room for fairy tales with a happy ending. If the last paragraph of CySEC’s announcement was true, it would have meant that all investors, traders, staff, affiliates and IBs of ioption were duly compensated and no problem whatsoever existed through this sudden exit of an established firm from the industry.
Alas, as many of you out there who have in one way or another fallen victim of this story already know, this is not true. Indeed, just a day after on January 8th , and perhaps due to reactions caused, CySEC issued yet another announcement, which reads as follows:
“Following the Cyprus Securities and Exchange Commission’s Announcement dated 7 January 2014 regarding the renouncement of CIF licence of «Scorpid Trading Ltd» (‘the Company’), the Commission clarifies that, the Company has not settled its obligations arising from the investment services provided via the domains www.ioptoneu.com and www.easyinvest.eu or/and activities that are terminated, but, as the Company informed the Commission, it undertakes all necessary actions to this objective.”
Obviously, all this is part of the legal and technical maneuvering necessary after the collapse of a company, as the regulator attempts to at least appear to be doing everything by the book, while the company shareholders are trying to escape unscathed.
We will refrain from further comments as the story seems to still be ongoing. As always feel free to share your thoughts or experiences with us on this or any other matter.
