Dual mixed martial arts champion Conor McGregor's latest sponsor is barred from operating in France for failing to comply with financial services regulations.
Cyprus-based online trading platform 24Option recently signed a six-month partnership deal with McGregor, who last week defeated rival Eddie Alvarez in New York to take the lightweight Ultimate Fighting Championship (UFC) title.
The Autorité des Marchés Financiers (AMF), the French financial regulator, banned 24Option, whose clients bet on movements in stocks and currencies, from recruiting new customers or maintaining relations with existing ones.
An AMF statement said that it found that Rodeler Ltd, trading as 24Option, failed to comply with obligations to provide relevant information and to act in an honest and fair manner in the best interests of its clients, "to the detriment of investors residing or based in France".
The regulator imposed the ban in August under an EU directive allowing states to take appropriate measures to protect investors where a business acts in a manner that is “clearly harmful” to investors’ interests.
Concerns
It is understood that the company’s position is that it has paused its operations in France while it is in talks with the AMF so it can deal appropriately with the regulator’s concerns.
McGregor appears on 24Option’s website and will feature in the company’s promotional material. He recently told his 2.9 million followers on Twitter: “At 24Option it’s all about trading. But you can’t trade shots with McGregor.”
Multiple grand slam winning tennis player Boris Becker and Italian Serie A side Juventus also endorse 24Option. The company has a marketing branch in Dublin that manages these deals.
24Option offers binary trading, which allows clients to bet on short-term movements, up or down, in currencies, stocks, commodities and other assets. They lose money if the asset moves against their predictions.
Regulators are suspicious of such websites and there is a debate on whether binary trading should be treated as gambling or investing. In 2012, the US Commodity Futures Trading Commission took action against Irish-based binary options business, Intrade, ultimately forcing it into liquidation.
Rodeler recently applied to the Companies' Registration Office to establish a subsidiary in the Republic. Law firm Mason Hayes Curran presented the application. Cyprus resident Petros Hadjikyriacos signed documents on behalf of the parent company.
Earlier this year, the Cypriot financial watchdog CySEC fined Rodeler €156,000, following which the company agreed to update its procedures to ensure that it complied with the country’s regulations.
