During a time when tighter regulations is at the front of a lot of cryptocurrency headlines, it really comes as no surprise that there has been a wave of new unregulated brokers appearing in the industry.
The value of Bitcoin has suffered this year, and has settled at below $7,000, yet new crypto brokers are crashing onto the scene, being compared to the wild west days of binary options. But, these unregulated brokers are much more likely to thrive in an environment where the price of Bitcoin is falling.
One former technology provider has been offering long-only exposure to crypto assets. Should the binary options industry translate into the crypto brokerage space, the attention will become materially higher, and putting pressure on brokers who are offering crypto trading will increase.
Those with any experience in dealing with financial assets are likely to be put off by some of the companies that are coming onto the scene; however, this is not going to stop the few more inexperienced traders who are lured in by unrealistic returns.
The actions of these phoney brokerages are mimicking the beginning of the binary options industry. The regulatory framework for trading forex is set to have a huge change, yet there is still a lack of defined rules for cryptocurrency trading, which is creating a huge risk.
The FCA has been issuing alerts against unregulated brokers in the past day, with particular attention being paid to the following companies; Novatrades, IDBTrades, Safemarkets, Brokers Station and Noble Capital House (NBH).
Those brokerages who are using cheap technology from technology providers have been the most heavily related to the binary options industry, and it is these who are more likely to cause a lot of damage to the future values of companies from the trading industry that are completely legitimate.