Can US Clients Trade Binary Options With Race Option

I. Executive Summary: Direct Answer and Key Findings on RaceOption for US Clients

This report analyzes the feasibility and legality of United States residents trading binary options through the online platform RaceOption. The central finding is unambiguous: United States residents cannot legally or practically trade binary options with RaceOption. The platform maintains an explicit policy prohibiting US clients, operates entirely outside the purview of US financial regulators (specifically the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC)), and engagement with such offshore, unregulated brokers presents profound legal and financial risks to US individuals.

The key findings supporting this conclusion are:

• Explicit Prohibition of US Clients: RaceOption’s terms or published information clearly state that it does not accept clients residing in the United States.¹
• Lack of US Regulation: RaceOption is not registered with, nor regulated by, the CFTC or the SEC.³ It is domiciled offshore in the Marshall Islands ³ and any claimed licenses are from entities not recognized as providing robust regulatory oversight comparable to major financial market authorities.¹
• US Regulatory Requirements: US law generally mandates that binary options, particularly those based on commodities (like forex or indices), must be traded on CFTC-regulated exchanges known as Designated Contract Markets (DCMs) when involving retail clients.⁵ It is illegal for unregistered entities to solicit or accept funds from US residents for such trading.⁵
• Regulatory Warnings: RaceOption and its parent company, Race Projects Ltd., have been the subject of warnings from international regulators, including implicit concerns from the US CFTC and explicit warnings from authorities in New Zealand and France, identifying them as potentially operating illegally or posing significant risks due to their unlicensed status.³ The CFTC maintains a Registration Deficient (RED) List for entities soliciting US clients without proper registration, a category into which RaceOption falls.⁵
• Substantial Risks for US Residents: Trading with unregulated offshore brokers like RaceOption exposes US residents to severe risks, including potential fraud, difficulties or impossibility of withdrawing funds, identity theft, use of manipulated trading software designed to cause client losses, and a complete absence of meaningful legal recourse.³
• Legitimate US Alternatives: Viable and legal avenues for trading binary options or similar products exist within the United States through CFTC-designated exchanges, such as Nadex, which operate under strict regulatory supervision.⁴

related posts : Best Binary OptionS Brokers (in 2025)

II. RaceOption Profile: Operational Overview and Services Offered

RaceOption operates as an online trading platform owned by Race Projects Ltd..³ Established around 2017, its headquarters are registered in the Marshall Islands.³ This choice of location is significant; the Marshall Islands is widely recognized as an offshore financial center, often selected by firms aiming to operate under less stringent regulatory regimes compared to major financial hubs like the United States or the United Kingdom. Such offshore domiciles are frequently associated with entities seeking to minimize regulatory compliance burdens and oversight.

The platform provides trading services across a range of financial instruments. These include traditional Forex currency pairs, Contracts for Difference (CFDs) on assets like stocks, commodities, indices, and cryptocurrencies.¹ Notably, RaceOption offers leverage up to 1:500 on its CFD products ¹, a level considered very high and indicative of a high-risk trading environment. A central and defining product offered by RaceOption is binary options trading.¹ The prominence of binary options is particularly relevant as these products have been banned or severely restricted for retail traders in numerous regulated jurisdictions, including the European Union and the UK, due to concerns about investor protection and their speculative nature.³ RaceOption’s focus on binary options likely contributes to its inability to obtain licenses from regulatory bodies in these major markets.³

RaceOption promotes several platform features designed to attract traders. These include copy trading facilities (allowing users to mimic the trades of others), various technical analysis tools, market sentiment indicators, and bonus programs.² The platform typically requires a minimum initial deposit of $250.¹ RaceOption also heavily advertises exceptionally fast withdrawal processing, claiming funds can be credited back to traders within one hour.¹ While features like bonuses and copy trading are common marketing tools for offshore brokers, the claim of one-hour withdrawals should be treated with considerable skepticism, especially given the platform’s unregulated status and anecdotal advice from some users of similar platforms to withdraw profits immediately due to potential access issues.³

The combination of RaceOption’s offshore base in the Marshall Islands ³, its emphasis on binary options (a product restricted in many regulated markets ³), and its lack of registration with major financial regulators ³ points towards a business model predicated on regulatory arbitrage. The platform appears strategically designed to attract traders, potentially including those from regulated countries, who seek access to products or trading conditions (like high leverage or binary options) unavailable through brokers compliant with stricter local regulations. This operational strategy deliberately positions RaceOption outside the robust investor protection frameworks mandated in jurisdictions like the US.

Furthermore, the simultaneous offering of high-leverage CFDs (up to 1:500 ¹) and binary options ¹ signals an environment tailored specifically for high-risk speculation. Both product types inherently carry significant risk; high leverage magnifies both potential gains and losses dramatically, while binary options possess an all-or-nothing payout structure often compared to gambling.³ Providing these products under an unregulated umbrella ³ suggests RaceOption targets traders with a high tolerance for risk, potentially including those less experienced or drawn by the allure of rapid profits promoted by the platform. This environment significantly increases the potential for substantial and swift client losses, particularly concerning given that in the typical binary options model, the broker acts as the counterparty and profits directly from client losses.⁷

III. Regulatory Status: RaceOption’s Lack of US Registration and Offshore Operations

A critical factor determining RaceOption’s legitimacy for US clients is its regulatory status, or lack thereof. RaceOption is not registered with either the CFTC or the SEC.³ This is a fundamental deficiency, as US law, primarily the Commodity Exchange Act (CEA), generally requires firms acting as intermediaries or operating exchanges for derivatives products involving US retail clients to register with the appropriate regulatory body.⁵ This includes entities offering futures, options on futures (including binary options based on commodities like forex or indices), swaps, or retail forex trading.

The registration process under CFTC or SEC oversight is rigorous, involving thorough background checks of principals and associated persons, adherence to minimum financial requirements, compliance with disclosure and recordkeeping rules, submission to regulatory examinations, and adherence to strict conduct standards designed to protect customers.¹³ By operating without this registration, RaceOption bypasses all these critical investor protection measures.

RaceOption’s operation from the Marshall Islands ³ places it firmly outside the direct jurisdiction and supervisory reach of US regulators. While certain provisions exist for foreign firms to be exempt from US registration, these typically require adherence to a comparable and robust regulatory regime in their home country, a standard the Marshall Islands framework and RaceOption’s claimed licenses do not meet, especially for a firm offering high-risk products like binary options to a global clientele.¹³ Engaging with offshore entities that are not registered in the US significantly diminishes investor protections and makes resolving disputes or recovering funds exceptionally challenging, often requiring complex international legal action.⁷

Some promotional materials or third-party reviews may mention that RaceOption claims regulation by entities such as the IFMRRC (International Financial Market Relations Regulation Center) or MISA, or holds a license from the Marshall Islands Trust Company.¹ It is crucial to understand that these are not recognized governmental regulatory bodies equivalent to the CFTC, SEC, the UK’s Financial Conduct Authority (FCA), or similar authorities in major financial markets. Organizations like IFMRRC are often industry self-regulatory bodies or private entities lacking governmental enforcement powers and offering minimal, if any, meaningful investor protection compared to established statutory regulators. Such claims of “regulation” can be highly misleading to traders seeking the security associated with genuine regulatory oversight.

The absence of legitimate regulation is a major red flag. US law clearly mandates specific CFTC or SEC registration for firms offering binary options to US retail clients.⁵ RaceOption fails to meet this requirement.³ Its offshore location ³ combined with the lack of recognized, comparable regulatory oversight further compounds the problem.⁷ Consequently, RaceOption’s operational and regulatory structure is fundamentally incompatible with the legal prerequisites for lawfully serving US clients. Its business model appears reliant on operating outside these established legal and investor protection frameworks.

The continued operation and reported popularity ³ of unregulated brokers like RaceOption, despite clear regulatory warnings ³ and the stated illegality of soliciting US clients without registration ⁵, suggests practical challenges exist in cross-border enforcement against offshore entities. Jurisdictional limitations and the ease with which online platforms can be established may allow such firms to persist and reach potential clients globally. This highlights an ongoing vulnerability for investors, particularly those attracted by high-risk products banned in their home markets, who might underestimate the dangers or be unaware of the platform’s illegal status concerning their residency.

IV. US Legal Framework: Binary Options Trading Regulations for Retail Clients

The trading of binary options by retail clients in the United States is subject to a specific and stringent regulatory framework overseen primarily by the CFTC and the SEC. Jurisdiction depends on the underlying asset of the binary option contract: if the underlying asset is a commodity (such as foreign currencies, broad-based stock indices, interest rates, or physical commodities like metals or agricultural products), the CFTC generally has jurisdiction.⁵ If the underlying asset is a security (such as the stock of a specific company), the SEC typically has jurisdiction.⁸

Crucially for retail US clients, binary options classified as commodity options must be traded on a CFTC-registered exchange, specifically a Designated Contract Market (DCM).⁵ Similarly, binary options considered securities must be offered and sold pursuant to an effective SEC registration statement or a valid exemption from registration, and typically traded on an SEC-registered national securities exchange.⁸

This requirement significantly limits the number of venues where US residents can legally trade binary options. Currently, only a handful of exchanges are registered and designated by the CFTC to offer binary options or similar event contracts to retail clients. The North American Derivatives Exchange (Nadex) is the most prominent example.⁶ The Chicago Mercantile Exchange (CME) has also offered certain event-based contracts structured similarly to binary options.¹¹ Historically, Cantor Exchange also offered these products but ceased operations.¹¹

Operating a platform that solicits or accepts funds from US residents for binary options trading without the required CFTC or SEC registration is illegal.⁵ This prohibition applies broadly to offshore entities targeting US persons. US regulatory agencies, including the CFTC, SEC, and the FBI, have issued numerous alerts and warnings regarding widespread fraud associated with unregistered binary options platforms, many of which operate offshore.⁵ These fraudulent activities often involve misrepresentation, refusal to return client funds, identity theft, and manipulation of trading outcomes.⁵

The structure of US regulation creates a deliberately high barrier to entry for binary options providers targeting retail clients. The mandate to trade only on registered exchanges (DCMs or SEC-registered exchanges) ⁵ imposes substantial operational, financial, and ongoing compliance costs on operators. The registration and oversight processes themselves are rigorous.¹³ The outcome is a very limited number of legally operating platforms available to US retail traders.⁷ This framework is designed not merely to regulate but effectively to restrict the widespread availability of binary options, channeling activity onto a few highly vetted platforms where regulatory supervision and investor protection measures can be maximized. This approach contrasts sharply with the proliferation of easily accessible, unregulated offshore platforms like RaceOption.

Underlying the US regulatory approach is a distinction between legitimate financial market activity (hedging, price discovery) and activities more akin to gambling. Binary options, with their fixed all-or-nothing payouts and short durations, are frequently characterized as resembling gambling rather than traditional investment.¹⁹ While US financial regulation, particularly under the CEA, aims to facilitate risk management and efficient pricing in commodity markets ²¹, it generally seeks to discourage or tightly control purely speculative instruments that lack economic utility. Although the CFTC has permitted certain binary options on regulated exchanges ⁷, acknowledging they might meet specific criteria or have limited hedging applications (though their hedging effectiveness is considered weak compared to traditional derivatives ²¹), the strict requirement for on-exchange trading ⁵ and the strong warnings against offshore platforms ⁵ demonstrate a clear intent to prevent the market from becoming a conduit for unregulated online gambling. From a US legal perspective, RaceOption’s offering falls squarely into the category of prohibited, unregulated activity.

V. RaceOption’s Stance: Official Policy Regarding United States Residents

Direct investigation into RaceOption’s policies reveals an explicit stance regarding clients from the United States. Multiple sources confirm that RaceOption does not accept traders or accounts from the United States.¹ This prohibition is typically enforced during the account registration process.

The stated reason for this policy, according to one source, relates to regulatory restrictions surrounding certain financial instruments offered by the broker, such as CFDs.¹ While CFDs are indeed restricted for US retail clients unless traded on a regulated exchange, the primary driver for RaceOption’s exclusion of US clients is almost certainly the stringent US regulatory framework governing binary options and the requirement for CFTC/SEC registration to solicit or serve US persons for such products.⁵ Operating without this registration makes serving US clients illegal.

RaceOption’s policy against accepting US clients can be understood as a necessary self-protective measure. Given that soliciting US clients for binary options trading without the requisite CFTC/SEC registration is unlawful ⁵, and RaceOption lacks this registration ³, explicitly barring US residents ¹ is a step to avoid overt violation of US laws and potential enforcement actions from US regulators. This policy represents an implicit acknowledgment by the platform of the legal barriers preventing its legitimate operation within the US market.

However, a potential discrepancy exists between this official policy and the practical realities of the online environment. Offshore, unregulated platforms are sometimes accessed by individuals from restricted jurisdictions using techniques to obscure their location (e.g., VPNs) or by providing false information during registration. Despite the official ban and regulatory warnings, some sources note RaceOption’s continued popularity ³, which might suggest attempts by individuals, potentially including US residents, to circumvent the restrictions. This highlights the practical challenges of enforcing geoblocking effectively and the persistent demand from some traders (perhaps fueled by product bans in their own regulated markets ³) to access platforms offering restricted products, even when doing so involves significant risk and potential illegality. This creates a perilous situation where users might gain access but forfeit any possibility of regulatory protection or legal recourse if disputes or fraud occur.

VI. Risk Assessment: Dangers for US Clients Engaging with Unregulated Offshore Brokers

Engaging with unregulated offshore brokers like RaceOption presents a multitude of severe risks for United States residents. These risks extend far beyond normal market volatility and encompass potential illegality, fraud, and the complete loss of invested capital with little to no chance of recovery.

• Fraudulent Activities: The primary risk is encountering outright fraud. The CFTC, SEC, and FBI have documented numerous complaints against unregulated binary options platforms.⁵ Common fraudulent practices include platforms refusing to credit customer accounts, denying or ignoring withdrawal requests, outright theft of funds, requiring exorbitant hidden fees for withdrawals, and committing identity theft by improperly demanding extensive personal documentation.³ Furthermore, there are allegations of platforms manipulating their trading software to generate losing trades for clients, for instance, by altering expiration times or distorting price feeds.⁵
• Lack of Regulatory Protection: US clients trading with unregulated offshore entities forfeit all protections afforded by the US regulatory system. These protections, mandated for registered firms, include requirements for maintaining adequate capitalization, segregating client funds from firm operational funds, ensuring fair dealing and execution practices, providing transparent disclosures, and offering access to dispute resolution mechanisms.³ Without regulation, none of these safeguards apply.
• Fund Security: Funds deposited with brokers like RaceOption are not protected by US investor compensation schemes (like SIPC for securities or specific CFTC protections for futures). There is no guarantee that funds are held in segregated accounts at reputable banking institutions, significantly increasing the risk that client money could be lost due to broker insolvency, mismanagement, or outright theft.³ While RaceOption might claim to use segregated accounts ², this cannot be verified by independent regulators and offers little comfort given the lack of oversight.
• Legal Recourse Issues: Should a US client encounter problems, such as the inability to withdraw funds or suspected fraud, pursuing legal action against an offshore entity based in a jurisdiction like the Marshall Islands is extremely difficult, expensive, and often futile.⁷ US courts may lack jurisdiction, and enforcing judgments internationally against elusive offshore companies is a significant challenge.
• Misleading Marketing and Information: Unregulated platforms frequently employ aggressive marketing tactics, including unrealistic promises of high or guaranteed returns, high-pressure sales calls, fake testimonials or reviews, and potentially manipulated historical performance data to lure unsuspecting investors.³
• Counterparty Risk and Conflict of Interest: In the binary options model commonly used by offshore brokers, the platform itself often acts as the direct counterparty to the client’s trade.⁷ This creates an inherent conflict of interest: the broker profits only when the client loses. In an unregulated environment, this provides a strong incentive for the broker to manipulate trading conditions, prices, or payouts to ensure client losses.⁵

These risks are not isolated but are interconnected and systemic within the unregulated offshore brokerage environment. The lack of regulation ³ removes essential checks and balances, enabling fraudulent behavior.⁵ The offshore location ³ effectively shields the operator from accountability and legal recourse for victims.⁷ The inherent conflict of interest in the counterparty model ⁷ provides a clear motive for abuse when oversight is absent. Therefore, dealing with a platform like RaceOption is not merely engaging in high-risk trading; it is exposing oneself to a structurally disadvantageous environment where the probability of financial harm due to malpractice or fraud is exceptionally high, with no safety net.

The marketing appeal of binary options, often emphasizing high potential payouts (like the up to 90-95% advertised by RaceOption ¹) and apparent simplicity (a binary yes/no outcome ⁵), masks the underlying structural disadvantages for the trader. Typically, the amount risked on a losing trade (100% of the stake) is greater than the potential profit on a winning trade.⁷ This means a trader must achieve a win rate significantly higher than 50% just to break even, before considering fees. On unregulated platforms, this disadvantage is amplified by the potential for the broker to manipulate odds, execution, or payouts ⁵, further skewing the probabilities against the client. The product itself is widely considered more akin to gambling than a prudent investment strategy.¹⁹ Consequently, the attractive facade hides a reality where sustained profitability is highly improbable, and the risk of significant financial loss is substantial, particularly when facilitated by an unregulated entity like RaceOption.

VII. Official Warnings: Regulatory Advisories Concerning RaceOption

RaceOption and its associated entities have drawn negative attention from multiple financial regulatory bodies globally. These official warnings serve as strong indicators of the risks associated with the platform.

Sources indicate that the US CFTC has issued warnings regarding Race Projects Ltd., the parent company of RaceOption.³ These warnings reportedly advise that the entity should be considered risky, potentially fraudulent, or a scam due to its lack of required licenses and its illegal operation in jurisdictions mandating registration.³ Furthermore, the CFTC maintains a Registration Deficient (RED) List, identifying foreign entities believed to be soliciting US residents without proper CFTC registration.⁵ While not explicitly confirmed in the provided snippets if RaceOption is currently on the list, its operational profile aligns perfectly with the criteria for inclusion.

Beyond the US, other international regulators have issued specific warnings:

• The Financial Markets Authority (FMA) of New Zealand has also issued warnings regarding Race Projects Ltd. and its brands, advising they be considered scams due to lack of licensure and illegal operations.³
• The Autorité des Marchés Financiers (AMF) and Autorité de Contrôle Prudentiel et de Résolution (ACPR) in France explicitly named www.raceoption.com, along with associated entities Affort Projects SA and Finance Group Corp., in a public warning against websites offering Forex investments without the necessary authorization in France.¹⁶ This warning also included other associated websites like www.binarycent.com and www.videforex.com.
• The Securities Market Agency (ATVP) of Slovenia includes RaceOption/Race Projects LTD in its published list of warnings received from other regulators, indicating awareness of the concerns raised by international counterparts.¹⁵

These regulatory actions consistently highlight RaceOption’s failure to obtain the necessary authorizations or licenses required to operate legally and solicit clients in various regulated territories. The warnings emphasize the significant risks of financial loss and potential fraud faced by investors who deal with such unauthorized entities.³

The following table summarizes key regulatory warnings identified:

Issuing Authority	Entity Named	Website(s) Mentioned	Nature of Warning	Source Snippet(s)
US CFTC (Implied)	Race Projects Ltd / RaceOption	(Implied raceoption.com)	Lack of license, illegal operation, consider scam	3
New Zealand FMA	Race Projects Ltd / RaceOption	(Implied raceoption.com)	Lack of license, illegal operation, consider scam	3
France AMF/ACPR	RaceOption / Affort Projects SA / Finance Group Corp	www.raceoption.com	Offering Forex investments without authorization	16
Slovenia ATVP (via others)	RaceOption / Race Projects LTD	(Implied raceoption.com)	Warning based on alerts from other regulators	15

The consistency of these warnings across multiple international jurisdictions (North America, Europe, Oceania) demonstrates that RaceOption’s operational model conflicts with established regulatory standards in numerous major markets. It operates outside the accepted international norms for financial services providers, marking it as a globally recognized high-risk entity from a regulatory standpoint.

These official advisories are significant because they move the assessment of RaceOption beyond theoretical risks based on its unregulated nature. They represent documented concerns from authorities tasked with investor protection, often triggered by consumer complaints or market surveillance. The existence of these specific warnings provides strong, concrete validation of the dangers inherent in RaceOption’s model and corroborates the broader risks associated with unregulated offshore platforms discussed earlier.

VIII. Viable Alternatives: Regulated Binary Options Trading in the US

Despite the illegality and risks associated with offshore platforms like RaceOption, it is important to note that binary options trading itself is not entirely prohibited for US residents. However, it is strictly channeled onto platforms that meet rigorous US regulatory standards.⁵

Legitimate trading of binary options (or similar event contracts) by US retail clients must occur on exchanges registered with and regulated by the CFTC as Designated Contract Markets (DCMs).⁵

The most prominent currently operating example is the North American Derivatives Exchange (Nadex), which is explicitly identified as a CFTC-regulated exchange offering binary options in the US.⁴ Trading on such regulated exchanges offers critical advantages absent from platforms like RaceOption:

• Regulatory Oversight: Operations are continuously monitored by the CFTC.⁴
• Investor Protections: Mandatory safeguards include the segregation of customer funds from the exchange’s operational capital, rules ensuring fair trade execution, and transparency requirements.⁷
• Transparency: Clear rules, pricing mechanisms, and operational procedures are available.⁴
• Legal Recourse: Clients have access to dispute resolution mechanisms and legal remedies within the US judicial system.⁷
• Legal Operation: These exchanges function entirely within the US legal and regulatory framework.⁶

The differences between an unregulated offshore broker like RaceOption and a regulated US exchange like Nadex are stark, as illustrated below:

Feature	RaceOption	Regulated US Exchange (e.g., Nadex)
US Regulation (CFTC/SEC)	No 3	Yes (CFTC) 4
US Clients Accepted	No (Officially Prohibited) 1	Yes 6
Legal Status for US Clients	Illegal to solicit/serve 5	Legal 6
Investor Protections (Fund Segregation etc.)	None verifiable / No US standard 3	Yes, mandated by CFTC rules 7
Legal Recourse for US Clients	Extremely limited / Impractical 7	Yes, within US legal system 7
Primary Oversight Body	None recognized / Offshore “licenses” 1	US CFTC 4
Operational Base	Offshore (Marshall Islands) 3	United States 6

The existence of these regulated alternatives clearly demonstrates that the US regulatory stance is not a complete ban on binary options as a product type. Rather, it is a prohibition against their offering through unregulated channels, particularly those operating offshore and soliciting US persons illegally.⁵ The regulations aim to ensure that any access US retail clients have to these high-risk products occurs only within a highly controlled environment designed to maximize investor protection.

However, the very limited number of regulated US exchanges offering binary options ⁷ might inadvertently contribute to the appeal of the far more numerous, albeit illegal and risky, offshore platforms for certain traders. These regulated exchanges may have different fee structures (Nadex, for instance, charges entry and exit fees per contract ⁴), potentially fewer underlying markets, or different platform interfaces compared to offshore brokers. Offshore entities often employ aggressive marketing, attractive-sounding bonuses, and simplified (though potentially misleading) platforms to draw users.³ Combined with the demand potentially driven by bans in other regions ³, this dynamic might make offshore options seem more accessible or appealing to traders who are less informed about the risks or who prioritize access over safety, despite the profound dangers and illegality involved. This underscores the critical importance of investor education alongside strict regulation.

IX. Conclusion and Recommendations: Final Verdict and Guidance for US Residents

Based on a thorough analysis of RaceOption’s operational characteristics, regulatory status, stated policies, and the applicable US legal framework, the conclusion is definitive: RaceOption is not a permissible, legal, or safe platform for residents of the United States to trade binary options.

The platform explicitly prohibits US clients ¹, a policy necessitated by its lack of required registration with the CFTC and SEC.³ Operating offshore ³ without recognized regulatory oversight, RaceOption functions outside the legal framework designed to protect US investors engaging in derivatives trading.⁵ Furthermore, the platform and its associated entities have been flagged by multiple international financial regulators for operating without authorization and posing risks to investors.³

Attempting to circumvent RaceOption’s restrictions or engaging with any similar unregulated offshore binary options platform exposes US residents to extreme and unacceptable risks. These include, but are not limited to, the high probability of encountering fraudulent schemes, the potential for complete loss of deposited funds through theft or manipulation, identity theft, and the absence of any practical legal recourse.⁵

Therefore, the following recommendations are strongly advised for US residents considering binary options trading:

1. Strictly Avoid RaceOption: Do not attempt to open an account, deposit funds, or trade with RaceOption or any affiliated platforms (e.g., BinaryCent, VideForex mentioned in warnings ¹⁶). Respect their stated policy prohibiting US clients, as it reflects the underlying illegality of their service for US persons.
2. Verify Registration Before Investing: Before engaging with any platform offering binary options, forex, CFDs, or other derivatives, rigorously verify its registration status. For platforms dealing in commodity-related products (forex, indices, etc.), check the National Futures Association’s (NFA) BASIC database.¹³ For platforms dealing in securities-based products, check the SEC’s EDGAR database and list of registered exchanges.⁸ Assume any platform not found in these official databases is operating illegally with respect to US clients.
3. Utilize Regulated US Exchanges: If interested in trading binary options or similar products, confine activities exclusively to CFTC-regulated Designated Contract Markets (DCMs) operating legally within the United States, such as Nadex.⁶ Thoroughly understand their product structures, fees, and platform rules before trading.
4. Exercise Extreme Caution with Offshore Entities: Be inherently skeptical of any financial services firm operating offshore that solicits US residents. Consult the CFTC’s RED List for known unregistered foreign entities.⁵ Remember that a lack of robust, recognized regulation equates to a lack of meaningful investor protection.⁷
5. Recognize Red Flags of Fraud: Be alert to common warning signs of fraudulent operations, including: promises of unrealistically high or guaranteed profits with little risk; claims of proprietary “secret” trading systems or signals; pressure to deposit more funds quickly; offers of large bonuses tied to unrealistic trading volumes; difficulties or delays in processing withdrawal requests; evasiveness regarding the company’s location or regulation; and requests for sensitive personal information beyond standard account verification needs.⁵
6. Report Suspicious Activity: If you encounter a platform suspected of operating illegally or fraudulently targeting US residents, report it to the CFTC ⁵ and the SEC.¹²

In conclusion, while the global online marketplace may present numerous platforms offering high-risk financial products like binary options, the US regulatory environment provides clear boundaries for legal and protected participation. For US residents, prioritizing adherence to these regulations by using only properly registered and supervised domestic exchanges is essential. The significant dangers associated with unregulated offshore platforms like RaceOption vastly outweigh any perceived advantages, making them unsuitable and perilous options for US investors.

Download PDF

Works cited

1. Raceoption Broker: A Comprehensive Guide to Opening an Account – Trade Brains, accessed on April 22, 2025, https://tradebrains.in/features/raceoption-broker-a-comprehensive-guide-to-opening-an-account/
2. RaceOption Unveils New Trading Platform With Enhanced Features – Barchart.com, accessed on April 22, 2025, https://www.barchart.com/story/news/24851114/raceoption-unveils-new-trading-platform-with-enhanced-features
3. RaceOption – Is it a Scam or not? – UKTN, accessed on April 22, 2025, https://www.uktech.news/other_news/__trashed-3
4. 10 Best Binary Trading Platforms (☑️Updated 2025*) – FXLeaders, accessed on April 22, 2025, https://www.fxleaders.com/forex-brokers/binary-trading-platforms/
5. Binary Options Fraud | CFTC, accessed on April 22, 2025, https://www.cftc.gov/BinaryOptionsFraud/index.htm
6. Products to Trade | Nadex, accessed on April 22, 2025, https://www.nadex.com/product-market/
7. Beware of Off-Exchange Binary Options Trades | CFTC, accessed on April 22, 2025, https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/beware_of_off_exchange_binary_options.htm
8. CFTC/SEC Investor Alert: Binary Options and Fraud, accessed on April 22, 2025, https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/fraudadv_binaryoptions.html
9. Beware of Binary Options Mobile Apps | CFTC, accessed on April 22, 2025, https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/beware_of_binary_options_mobile.htm
10. Are binary options legal in the US? – Nadex, accessed on April 22, 2025, https://www.nadex.com/blog/are-binary-options-legal-in-the-us/
11. A Guide to Trading Binary Options in the US – Investopedia, accessed on April 22, 2025, https://www.investopedia.com/articles/active-trading/061114/guide-trading-binary-options-us.asp
12. Investor Alert: Binary options and Fraud – SEC.gov, accessed on April 22, 2025, https://www.sec.gov/investor/alerts/ia_binary.pdf
13. Be Smart: Check Registration & Backgrounds Before You Trade | CFTC, accessed on April 22, 2025, https://www.cftc.gov/check
14. Binary Options Fraud – FBI, accessed on April 22, 2025, https://www.fbi.gov/news/stories/binary-options-fraud
15. Warnings by other regulators | ATVP – Securities Market Agency, accessed on April 22, 2025, https://www.a-tvp.si/eng/warnings/warnings-by-other-regulators?page=728
16. The Autorité des marchés financiers and the Autorité de contrôle prudentiel et de résolution warn the public against the activities of several websites and entities proposing forex investments without being authorised to do so | AMF, accessed on April 22, 2025, https://www.amf-france.org/en/news-publications/news-releases/amf-news-releases/autorite-des-marches-financiers-and-autorite-de-controle-prudentiel-et-de-resolution-warn-public-10
17. Notice to Binary Option Investors – CFTC Fraud Advisory – David R. Chase, P.A., accessed on April 22, 2025, https://www.securitiesfrauddefense.net/notice-binary-option-investors-cftc-fraud-advisory/
18. Avoid Unregistered Binary Options Trading Platforms | CFTC, accessed on April 22, 2025, https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/avoid_unregistered_binary_options_platforms.htm
19. Binary option – Wikipedia, accessed on April 22, 2025, https://en.wikipedia.org/wiki/Binary_option
20. 10 Best Binary Trading Platforms From $1 (☑️Updated 2025*) – FXLeaders, accessed on April 22, 2025, https://www.fxleaders.com/forex-brokers/binary-trading-platforms-1-dollar/
21. CFTC Jurisdiction Should Not Extend to Event Contracts – CLS Blue Sky Blog, accessed on April 22, 2025, https://clsbluesky.law.columbia.edu/2024/09/23/cftc-jurisdiction-should-not-extend-to-event-contracts/
22. SEC Charges Binary Options Trading Platform and Two Top Executives with Fraud, accessed on April 22, 2025, https://www.sec.gov/newsroom/press-releases/2021-66
23. Intermediary Registration – Commodity Futures Trading Commission, accessed on April 22, 2025, https://www.cftc.gov/IndustryOversight/Intermediaries/registration
24. Registration and Membership | NFA – National Futures Association, accessed on April 22, 2025, https://www.nfa.futures.org/registration-membership/index.html
25. CFTC Issues Cease and Desist Order to Binary Options Operator Using Smart Contracts, accessed on April 22, 2025, https://www.blockchainandthelaw.com/2022/01/cftc-issues-cease-and-desist-order-to-binary-options-operator-using-smart-contracts/
26. US Court Orders Trading Firms to Pay $451M Over Binary Options Fraud, accessed on April 22, 2025, https://www.financemagnates.com/forex/us-court-orders-trading-firms-to-pay-451m-over-binary-options-fraud/
27. Is There A State Role For Binary Option Regulation? – California Corporate & Securities Law, accessed on April 22, 2025, https://www.calcorporatelaw.com/2015/11/is-there-a-state-role-for-binary-option-regulation