Building Science Corporation

Building Science Corporation

Building Science Corporation (BSC) is a relatively recent entrant into the increasingly complex world of binary options brokerage. Founded in 2015, it quickly gained, and subsequently lost, significant traction within the industry, largely due to aggressive marketing, concerns surrounding regulatory compliance, and ultimately, legal issues. This article provides a comprehensive overview of Building Science Corporation, its history, its platform, the controversies surrounding it, and lessons for traders navigating the binary options market. It is crucial to understand that BSC is no longer actively operating in a legitimate capacity, and this article serves as a cautionary tale and a case study.

History and Rise

Building Science Corporation emerged during a period of rapid growth in the binary options industry. The company positioned itself as a provider of a technologically advanced trading platform, offering a wide range of underlying assets and payout structures. Key to their initial success was a heavy investment in online advertising, particularly through social media and search engine marketing. They specifically targeted novice traders with promises of high returns and simplified trading experiences.

BSC's marketing materials frequently emphasized the potential for “guaranteed profits” and showcased testimonials from allegedly successful traders. This marketing approach, while effective in attracting new clients, proved to be a major point of contention later on, as many claims were unsubstantiated and misleading. They utilized a multi-tiered affiliate marketing program, incentivizing individuals to recruit new traders, further amplifying their reach.

The company's headquarters were initially located in Cyprus, a jurisdiction popular for financial services firms due to its relatively lenient regulatory environment. However, as scrutiny increased, BSC shifted operations and attempted to establish a presence in other locations, including the Marshall Islands. This shifting of operational bases is a common tactic employed by firms attempting to avoid stricter regulation.

The Trading Platform

The BSC platform, known as OptionRally (a name the company frequently used interchangeably with Building Science Corporation), offered a web-based interface accessible through most standard web browsers. The platform allowed traders to execute binary options contracts on a variety of assets, including:

Forex pairs (e.g., EUR/USD, GBP/JPY)
Stocks (e.g., Apple, Google)
Indices (e.g., S&P 500, NASDAQ)
Commodities (e.g., Gold, Oil)

The platform featured several different types of binary options, including:

High/Low options: The most basic type, predicting whether the asset price will be above or below a certain strike price at expiry.
Touch/No Touch options: Predicting whether the asset price will touch a specified strike price before expiry.
Range options: Predicting whether the asset price will remain within a defined range before expiry.

BSC also offered features like technical indicators, charting tools, and risk management options. However, many users reported issues with the platform’s reliability, including lagging data feeds, execution errors, and difficulties withdrawing funds. The platform also utilized a proprietary software, making independent verification of trade execution extremely difficult.

BSC Platform Features
Feature
Underlying Assets
Option Types
Charting Tools
Risk Management
Account Types

Concerns and Controversies

Building Science Corporation quickly became embroiled in controversy, attracting the attention of regulatory bodies worldwide. Several key issues contributed to its downfall:

**Misleading Advertising:** The company’s aggressive marketing tactics, emphasizing guaranteed profits and unrealistic returns, were widely criticized as deceptive and misleading. This directly violates principles of responsible risk disclosure.
**Refusal to Process Withdrawals:** Numerous traders reported significant difficulties withdrawing their funds from their BSC accounts. Complaints included delayed payments, arbitrary account restrictions, and outright refusal to process withdrawal requests. This is a common red flag for fraudulent binary options brokers.
**Manipulation of Trading Results:** There were allegations that BSC manipulated trading results to prevent traders from consistently profiting, ensuring the company retained the majority of deposited funds. This could be done through price manipulation or altering trade execution.
**Unlicensed Operations:** Despite operating globally, BSC lacked proper licensing and regulation in many of the jurisdictions where it actively solicited clients. This lack of oversight allowed the company to operate with minimal accountability.
**Affiliate Program Issues:** The aggressive affiliate program incentivized unethical recruitment practices, pushing inexperienced traders into a high-risk market without adequate education or understanding. Many affiliates lacked any understanding of binary options trading strategies.
**Spoofing and Layering:** There were accusations, though difficult to definitively prove, of BSC engaging in market manipulation techniques like spoofing (placing orders with no intention of executing them to create a false impression of market depth) and layering (placing multiple orders at different price levels to manipulate the price).

Regulatory Action and Legal Proceedings

The mounting complaints and allegations prompted regulatory investigations in several countries.

**United States:** The US Commodity Futures Trading Commission (CFTC) filed a civil enforcement action against Building Science Corporation and its principals in 2016. The CFTC alleged that BSC fraudulently solicited funds from US residents and engaged in illegal off-exchange binary options trading. The court ultimately ordered BSC to pay over $12 million in restitution to defrauded customers.
**Canada:** Canadian regulators also issued warnings about BSC and took action to prevent the company from soliciting clients in Canada.
**United Kingdom:** The Financial Conduct Authority (FCA) issued warnings about OptionRally (BSC) and highlighted the risks associated with trading with unregulated brokers.
**Israel:** Israeli authorities investigated BSC and raided its offices, uncovering evidence of fraudulent activity.

These regulatory actions effectively shut down BSC's operations, leaving many traders with substantial losses and unresolved withdrawal requests. The case highlights the importance of verifying the legitimacy of a broker before depositing funds, and understanding binary options risks.

Lessons for Traders

The Building Science Corporation saga provides several crucial lessons for anyone considering trading binary options:

1. **Verify Regulation:** Always ensure that a binary options broker is properly licensed and regulated by a reputable financial authority. Check the regulator's website to confirm the broker's status. Look for regulation from bodies like CySEC (Cyprus Securities and Exchange Commission), but also be aware of the limitations of these licenses. 2. **Beware of Guaranteed Profits:** No binary options broker can guarantee profits. The market is inherently risky, and losses are a possibility. Any claims of guaranteed returns should be treated with extreme skepticism. 3. **Research the Broker:** Before depositing funds, thoroughly research the broker's reputation. Read online reviews, check for complaints with regulatory bodies, and look for independent assessments of the broker's platform and services. 4. **Understand the Risks:** Binary options are high-risk investments. Ensure you fully understand the risks involved before trading. Familiarize yourself with concepts like payout percentages, expiry times, and the impact of market volatility. 5. **Start Small:** If you are new to binary options trading, start with a small deposit and trade small amounts. This will allow you to gain experience and learn the ropes without risking a significant amount of capital. 6. **Use Risk Management Tools:** Employ risk management tools like stop-loss orders (if available and reliable) to limit potential losses. Don't risk more than you can afford to lose on any single trade. 7. **Be Wary of Aggressive Marketing:** Be cautious of brokers who use aggressive marketing tactics or pressure you to deposit funds quickly. Legitimate brokers will provide clear and transparent information about their services. 8. **Understand the Platform:** Before trading, familiarize yourself with the broker's trading platform. Ensure you understand how to place trades, manage your account, and withdraw funds. 9. **Document Everything:** Keep detailed records of all your trades, deposits, and withdrawals. This documentation can be helpful if you encounter any disputes with the broker. 10. **Consider Alternatives:** Explore other investment options before considering binary options. Binary options are not suitable for all investors, and there are often less risky alternatives available. Consider forex trading or stock trading as potential alternatives.

Current Status

As of late 2023, Building Science Corporation (and OptionRally) is effectively defunct. The company ceased operations following regulatory action, and attempts to recover funds through legal channels have met with limited success. The website is no longer functional, and the company is not actively soliciting new clients. The case serves as a stark reminder of the risks associated with unregulated binary options brokers.

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⚠️ *Disclaimer: This analysis is provided for informational purposes only and does not constitute financial advice. It is recommended to conduct your own research before making investment decisions.* ⚠️