Hello, this is Lucas from Wandering Traders LAB.
How are you guys doing?
I am really hungover now because I went to my friend’s birthday party yesterday and drunk too much lol
But I could get so much important info about the financial market in Europe,
so I am going to talk about some of the things that I heard yesterday!
Why Binary Option is banned in Europe?
This is pretty simple.
It is because of “Terrorism”.
Lately, in Europe, terrorist groups are getting larger and radical.
Many people have died and people are scared to go out just for going shopping.
But there is one question by thinking about the terrorist group.
How they collect their money?
They collect from everywhere.
Corporation, billionaire, politician, and so on.
So the government wants to stop their resources in any ways.
If the government find out grey areas of the company, then they are going to restrict that company.
If the company doesn’t pay taxes or maybe try to hide, then they are going to doubt the company and restrict finally.
There are still many reasons that the government is going to doubt you.
Binary Option is one of them.
Since it is not an official financial product, the government doesn’t admit as a legal corporation.
Binary Option is same as forex DD brokers, so they can determine the strike price.
They don’t have to depend on an International bank, but it is on their way.
Binary Option is same as Casino.
That’s why Binary Option is kind of taboo in Europe.
Why Cryptocurrency and forex are ok?
This is because of Blockchain.
Blockchain is a system in which a record of transactions made in bitcoin or another cryptocurrency is maintained across several computers that are linked in a peer-to-peer network.
That means that the government is able to keep eyes on it, and they can know when and who bought bitcoin or other crypto coins.
That’s why the cryptocurrency is allowed in Europe.
The reason why forex is also allowed is because of Non-dealing desk (NDD) system.
The source of profits comes from the difference between the rate provided by a covered financial institution and the rate that is provided to clients.
That is the NDD broker.
So they do really clear business, and the government admits as official.
In other words, brokers which are Dealing Desk (DD) system is not preferred.
Not only Europe but also All of the nations don’t admit DD brokers, basically.
For example, XM is the one of most famous DD broker in the world, and they have branches in Japan as well.
Since it is DD broker, Japanese Financial Service Agency has given them warning to stop their business in Japan three times so far.
So in Forex, if it is NDD brokers, then the government is not going to say anything.
However, if it is a DD broker, then it might be restricted by the government.
To sum up today’s article,
the reason why Binary Option is not allowed (restricted) in Europe is because of terrorism.
They are scared that money is going to flow to the terrorist group.
They also want to prevent money laundering.
Binary Option is not an official financial market and too dark business.
Same as DD forex brokers.
DD forex brokers are same as Binary Option. They are doing too dark business.
All right, this is it today.
If you have any questions, leave a comment below!
Have a nice day!