On 7 March 2014 the Cypriot regulator CySEC issued an announcement in order to inform investors that during a Commission board meeting on 13 January 2014 it had decided to impose an administrative fine of an amount of €5.000 to the company DC Digital Processing 2 Ltd for breaching article 4(1) of the relevant 2007 Cyprus’ law. More specifically, according to the CySEC announcement, on 30.11.2012 the company appeared to be providing, through its website www.optionbit.com/en/contact-us.aspx, financial services pertaining to binary options, while it was also found that it was indeed providing such services on a professional basis in the Republic of Cyprus until December 2012, without being in possession of a valid Cyprus Investment Firm license issued by CySEC, as the relevant legislation stipulates.
Although CySEC could have imposed a fine up to €350.000, it cites two mitigating factors due to which the fine was a mere €5.000. The first mitigating factor was the fact that the company had already informed CySEC of its intention to apply for a license in order to able to offer binary options services. The second factor was that since the date of the breaches of the law, the company has actually terminated the provision of binary options services. In fact, all its operations have been bought out and the domain name www.optionbit.com/en/contact-us.aspx, is no longer used for any of its activities.
This announcement may be viewed by some as puzzling. Indeed we also have doubts as to the necessity of such a decision. If CySEC had indeed discovered the wrong doing back in late 2012, why did it wait until January 2014, over a year later, to decide to impose a fine? And why did it then wait for almost another two months to lapse before announcing the decision? And really, what use is to the investing public if a company that no longer exists is ordered to pay a very small administrative fine?
It seems that CySEC wants to appear tough and not let any case drop, but at the same time some of its decisions are being taken in such a way and in such a timing that they are rendered insignificant. In any case what is perhaps interesting to observe in this case is the fact that currently the Option bit brand does operate normally offering binary options for many assets and across several platforms. This is because DC Digital Processing 2 Ltd, sold the brand to Novox Capital Ltd. Novox also operates the OptionXP brand, and it has received a CIF license in February 2014, following Tradologic’s decision, which is the platform provider behind these two brands, to apply for and obtain a CIF license, to be able to offer its numerous white labels the option of operating an EU regulated brokerage, under the umbrella of CySEC.
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.