Conor McGregor's 24Option sponsorship deal under spotlight as money laundering ties emerge
An online trading platform which sponsors UFC star Conor McGregor has reportedly been fined under money laundering laws.
24Option partnered with Conor McGregor in October last year and have gained promotion through the UFC star
Binary options trading site 24Option announced a sponsorship deal with the mixed martial artist and UFC lightweight champion in October 2016.
Since partnering, McGregor has promoted the brand through his Twitter and Instagram as well as featuring on its site.
Check out the @quickoption app. It's a cool one but trade carefully so you won't lose all your money. https://t.co/bY4FB0JbhP pic.twitter.com/08D249BZ3L
— Conor McGregor (@TheNotoriousMMA) October 4, 2016
The deal also includes promotions for VIP packages to McGregor’s fights and ads encouraging his followers to sign up to a bonus deal that required a deposit of €500 and €100,000 worth of trades.
The nature of the company’s business model involves an investor making a split decision on whether a share price will rise or fall in the next few hours with the prospect of a 90% return if the prediction is correct - if wrong, they will lose their initial investment. This has resulted in binary options trading being likened to a form of high risk gambling.
According to BuzzFeed News, the company has been fined under Cyprus money-laundering regulations, is banned in France, and is subject to warnings from another national regulator.
The 24Option brand is controlled by a Cyprus-registered company called Rodeler Limited which has been subject to action by regulators in several countries.
In January last year it was fined €156,000 (£132,000) by Cyprus’s security and exchange commission CySEC for a number of infringements of the country’s laws on investment markets and “suppression of money laundering and terrorist financing law”.
This included a series of compliance failures including inadequate complaints procedures, noncompliance with operating conditions, and failure to “act fairly, honestly, and professionally in accordance with the best interest of its clients” on bonuses, inadequate due diligence, and more.
In France, the company was banned from providing any services to new or existing customers under rules which are intended to “protect investors within its territory in cases where a service provider acts in a manner which is clearly harmful to the interests of those investors”. The decision marked the first time that any EU-regulated financial institution has been banned from operating in the country.
Similarly, Canada’s financial regulator placed 24Option on a list of unregistered trading platforms and issued a warning to Canadian’s not to use binary trading sites, saying that they were “trying to lure investors by making untrue and/or misleading statements about Canadian securities regulators’ oversight of binary options”.
A spokesperson for Rodeler claimed that the Cyprus fines were related to small and specific issues and maintained that businesses in many sectors with regulation are “fined on a regular basis” and added that “binary options trading is indeed a super high-risk – high-reward financial instrument, and therefore is not suitable for everyone”.