Apple, Google pull options trading apps after Australian regulator shows scams
'Earn up to 90% in less than an hour' apps binned, Apple vows they won't return
Apple and Google have pulled options trading programs from their respective app stores after being asked to do so by the Australian Securities and Investment Commission (ASIC).
ASIC is the nation's investment regulator and took exception to the apps for facilitating “binary option trading”, a speculative investment that sees punters pay cash to take a position in the future value of asset, a commodity or index. If the hoped-for value is reached, the punter gets a payout. If not, their cash vanishes and they are left without any asset of value. It is, however, possible to sell a binary option, which works when they take long-term positions, but is far harder when the instruments try to predict price movements in coming hours.
Binary options are not illegal in Australia, but can only be sold by licensed entities. ASIC also warns they are risky propositions, especially when sold for short-term movements.
ASIC therefore investigated over 330 apps offering binary option trading, and found plenty were nasty. Many made claims like “Earn up to 90% in less than an hour”, others did not explain how the company offering trades made a quid from the transaction. Others “were merely collecting personal information which could be used for high-pressure cold calling. For example, some developer websites associated with the apps promoted their ability to deliver traffic to casino, lottery, forex, and binary option service providers.”
Once the regulator had identified apps it felt represented a risk to investors, it contacted Google and Apple and found itself “encouraged with the speed both entities removed the relevant apps … from their respective app stores.” It's unclear exactly how many apps were removed, but ASIC has declared itself pleased that some have gone and that Apple recently changed its T&Cs to bar binary options trading apps from its store.
Binary options are legal in many nations, but generally attract heavy regulation because issuers have opportunities to influence markets to the detriment of buyers. Some believe they are little more than gambling.
ASIC warns punters that "In an age where technology can hide who is offering and controlling a product, buyer beware has never been so important. If something appears too good to be true, it probably is." ®