Financial Conduct Authority (FCA)
FCA confirms permanent ban on the sale of binary options to retail consumers
The FCA confirmed permanent rules prohibiting binary options sales to retail consumers and warned that firms offering them are likely to be a scam.
Regulators have not called every binary option a scam. They have restricted the product for retail clients, given reasons, and warned about fraud by firms. This page separates those two points using the regulators' own words and does not name any firm.
What the FCA Said About Firms
On 29 March 2019 the Financial Conduct Authority (FCA) said: "As the sale of binary options to retail consumers is now prohibited, any firm offering binary options services to retail consumers is likely to be a scam." The statement is about firms that offer the service to UK retail consumers after a ban, and it points consumers to the FCA's ScamSmart pages. The FCA's current wording on contact from unknown firms is in the FCA's warning signs.
What Regulators Said About the Product
Some regulators gave product-level reasons rather than describing fraud. ASIC listed three: the all-or-nothing payoff, short contract duration, and negative expected returns. It added that the average contract duration for binary options traded with one provider was under six minutes.
BaFin gave four reasons in its 2019 press release: binary options are complex and lack transparency; the provider determines the price and clients cannot check it; very short terms make risk and return hard to assess; and providers usually act as the direct counterparty to clients' trades. ASIC also said that in the 13 months before its ban, between 74% and 77% of active retail clients lost money trading binary options.
These are statements about how the product is built and how clients fared. They are not findings that a given firm committed fraud.
What the 2013 SEC and CFTC Alert Described
In an investor alert dated 6 June 2013, the SEC and CFTC described alleged fraud involving binary options platforms. The alert says customers who were encouraged by brokers by phone to deposit more money were then refused withdrawals or repayment. It also says platforms allegedly manipulated trading software so trades lose. These are allegations described in the alert, not court findings stated on this page. The alert also warns: "Do not invest in something that you do not understand."
So Is It a Scam?
The sources support a narrower answer than yes or no. A product can be restricted without every provider being fraudulent, and a fraudulent provider can exist without being named in a regulator's ban. The FCA's statement means a UK retail consumer should treat any firm offering the service with caution. For other places, read what the local regulator published in binary options regulation by country.
Frequently Asked Questions
Did regulators call all binary options a scam?
No. The FCA said firms offering binary options services to UK retail consumers are likely to be a scam after the ban. ASIC and BaFin described product features and risks.
What did ASIC say about client losses?
ASIC said that in the 13 months before the ban, between 74% and 77% of active retail clients lost money trading binary options.
How can I check a firm before dealing with it?
The FCA says: "Almost all financial services firms in the UK must be authorised or registered by us." See how to check if a broker is regulated.
Where do I report a suspected scam?
See how to report a binary options scam.
Sources and Official References
- FCA: FCA confirms permanent ban on the sale of binary options to retail consumers (29 March 2019)
- ASIC: ASIC bans the sale of binary options to retail clients (21-064MR)
- ASIC: Proposal to extend the binary options product intervention order (22-118MR)
- BaFin: press release on the ban on binary options (1 July 2019)
- SEC/CFTC: Investor Alert: Binary Options and Fraud (6 June 2013)
- FCA: Protect yourself from scams (last updated 19 January 2026)
This page summarises what the regulators' published guidance says. It does not address whether an individual could face liability. Seek independent legal advice.
This page summarises what the regulators' published guidance says. It does not address whether an individual could face liability. Seek independent legal advice.