Bank of Russia, the “Megaregulator” responsible for the oversight of financial markets in the country, is planning to check the operations of binary options brokers amid suspicions that they are indeed offering gambling services.
A report in Russia’s newspaper Kommersant quotes sources close to the central bank confirming the regulator’s plans to conduct checks at companies that formally state that they offer trading in derivatives and other financial products OTC, whereas in fact they operate as casinos.
The focus of the investigation will be on the growing number of binary options brokers in the country that offer betting on certain assets via slot machines. Although the labels on these machines say “Exchange terminal” or “Binary options terminal”, the machines usually offer people to gamble.
“Crazy monkey lottery”. The label on the machine says “Exchange Terminal”. (Photo credit: top.RBC.ru)
Companies operating such “Exchange terminals” hide behind the “binary options” label, arguing that trading on such machines is unregulated, since binary options are not covered by any Russian law.
Gambling activities, on the other hand, are strictly regulated in Russia. Since 2009, all gambling activities have been restricted to certain zones – any such activities outside of the restricted areas are prohibited. All lotteries that are not organized by the state have been outlawed since July 1, 2014.
As the Bank of Russia does not regulate gambling and cannot take enforcement action against such companies, it is likely to turn to the police.