A few years ago, ESMA, the European financial regulator banned all binary options in Europe. The FSCA of SA did not follow this move. This move by ESMA was unprecedented but probably required given the amount of predatory bucket-shops that were luring clients into depositing their savings and just stealing them using overt and covert tactics. Last year in 2019, they reversed this decision.
Most binary option bucketshops were whitelabel partners of the Isreal based company called Spot Option, which was later raided and closed by the FBI. It was a dark time but an important time as it paved the way for safer trading of this genuinely lucrative and simple way of making money in the financial markets.
In my humble opinion, binary options which allow a trader to bet up or down on the price of an asset, are and were never the problem. The problem was they were captured by thieving internet marketers who sold lies to lure clients into depositing money and then used an army of sales people into convincing them to keep sending more money. At times these so called account managers would even trade on behalf of the client or swipe funds from their credit cards without their consent.
The problem for regulators was that it was not possible to find the people behind these brokerages. They claimed to have offices in New York, UK and other established financial jurisdictions but in reality most it turned out stemmed from Ramat Gan in Isreal. So they went after Spot Option, the technology provider and banned the entire asset class as in the case of ESMA.
Fast forward to today, traditional binary options still exist. You can find them in gambling companies like Binomo, Binary.com, Pocketoption and High-Low.net. Unfortunately just one glance at their Forex Peace Army (FPA) ratings will show that all is not right. When you bet, you're betting against the house. It is the same in casinos and should be no different at brokerages where the broker is taking the other side of your trade. If you lose your bet you lose your total capital invested (100%) making this all or nothing style of trading very risky and can lead to gambling addiction.
This is why, in my humble opinion and after years of research, Spectre.ai breathed fresh air and brought true financial innovation to the industry with Digital Contracts. Digital Contracts still offer the allure of very high returns, but with far lower risk and a business model that is unique - one built around volume based compensation instead of outright losses at clients.
Here is why digital contracts are different:
You can close the trade before it expires and still make some return. This early close feature is not found at any other broker.
Before you enter any trade you can protect between 0.1%-75% of the capital invested, should the trade lose, if it loses. So your outcome is not binary where if you win you earn 80% but if you lose you lose 100%.
You can trade completely decentralised where you dont have to deposit with the broker but you can trade from your own on-line web wallet which is Ethereum based. This is a Wallet account at Spectre. Although most just use a Regular account because it has better payouts and more features, it is worth bringing up that today Spectre.ai is the only platform which offers decentralised trading.
Payouts are the highest in the industry ranging from 70% to 400% with average being around 90-100% on Spectre.ai's currency basket historical index which they call EPIC.
If you enable the detailed risk management options Spectre.ai has built, your capital will be protected. Again these features are a rarity with brokers usually just not offering any in the binary options space or the offering being rather sparse.