"Are binary options a crime?" is one of the most frequent searches on the subject — and it almost always comes from two opposite people: someone who has already traded and is scared, and someone thinking about starting who wants to know whether they "can". The answer requires separating two legal levels that usually get tangled together. Let us go slowly and precisely.
01The distinction that changes everything
The core point: Brazilian law draws a sharp distinction between those who offer and those who trade.
Trading as an individual
It is not defined as a crime under Brazilian law. In Brazil, conduct is only a crime if there is a law defining it as such — and trading binary options on a foreign platform is not listed as a crime for the investor.
You can legally access an international broker. The rules that apply are those of Brazil's tax authority and the Central Bank on remittances and taxation.
Offering/recruiting in Brazil
It is irregular. CVM Deliberation 598/2018 expressly prohibits offering binary options contracts in the country.
The CVM issues stop orders and fines against platforms that take on Brazilian clients — IQ Option and Olymp Trade have already been targeted. The fine for non-compliance can run into daily amounts.
In one sentence: it is not a "crime" for you to trade, but it is irregular for the platform to offer you the service here. In practice, that means you trade in an environment with no Brazilian legal protection at all — and that is where the real problem lies.
02What the CVM actually says
The CVM — Comissão de Valores Mobiliários, Brazil's securities regulator — classifies binary options as closer to gambling/betting than to a legitimate security. CVM Deliberation 598/2018 expressly prohibits the offering of these contracts in Brazil. From 2020 through 2025, the CVM kept up a series of alerts and stop orders against foreign companies (including IQ Option, Olymp Trade, Deriv, Binary) for irregularly taking on Brazilian investors.
The CVM itself, in its Alerts Series, clarifies that people domiciled in Brazil can invest abroad — as long as they follow the rules of the tax authority and the Central Bank. In other words: the door is not closed to the individual; it is closed to the irregular offering.
03The real risk (which matters more than legality)
Here is what the question "is it a crime?" often hides: the practical issue is not whether you will be arrested (you will not), it is whether you will lose your money — and the odds of that are high. The facts:
- No local legal protection. The platforms operate offshore, in tax havens, beyond the reach of the Brazilian courts. In a dispute, there is nobody to appeal to.
- The math is against you. With a payout of 70-85% against a 100% loss, the structure is statistically against you. It is estimated that around 80% of short-term traders lose money.
- Blocked withdrawals. The number one complaint. The money goes in easily; getting it out, very often, does not.
What other regulators did: the European Union (ESMA) banned the sale of binary options to retail clients in 2018. The United Kingdom (FCA) banned them permanently in 2019. It is no coincidence — the regulators that studied the product in depth concluded that it is structurally harmful to consumers.
04I already lost money — can I get it back?
Being honest: it is very hard. Because the platforms are based in tax havens, outside Brazilian jurisdiction, there is no local regulator to go after and recovery rarely happens. But there are steps worth taking if you were a victim:
- Gather evidence: transaction records, emails, screenshots of your communication with the platform.
- Report it to the CVM and to the police: even with no guarantee of recovery, it feeds the investigations and stop orders.
- Seek legal advice: in cases of clear fraud (not just a losing trade), Brazil's consumer protection code (CDC) may offer some backing. A lawyer can assess your case.
- Watch out for the second scam: "recovery firms" that charge upfront to "get your money back" are frequently a second scam. Be suspicious.
05Regulated, legal alternatives
If what attracted you to binaries was the idea of trading markets with technology, there are regulated routes that offer exactly that with real legal protection:
- Options on Brazil's B3 exchange (stock options) — a regulated market, with an authorized broker and legal backing. It is a real "option", not a binary bet.
- Futures contracts (the WIN mini index and the WDO mini dollar) — day trading on Brazil's B3 is regulated and has enormous volume.
- Forex through an established broker — legal in Brazil, under serious foreign regulators. See our broker reviews.
06Frequently asked questions
Will I be arrested if I trade binary options?
No. Trading as an individual is not defined as a crime under Brazilian law. What is irregular is the offering/recruiting by the platforms in Brazil. You commit no crime by trading — but you trade with no legal protection.
So why do people say it is "banned"?
Because the offering is banned (CVM Deliberation 598/2018). When people say "it is banned", they usually mean that — the CVM prohibits the platforms from offering it here. The confusion comes from applying that ban (which is on the companies) to the individual.
Do I have to declare it on my income tax return?
Yes, if you had a gain. It is treated as a capital gain in foreign currency. See our guide to tax on binary options. Not declaring exposes you to Brazil's tax authority — and the fact that it is offshore does not exempt you.
Can I recover money I lost?
It is very hard because there is no local jurisdiction over offshore platforms. Gather evidence, file a report with the CVM/police and seek legal advice. Be careful with "recovery firms" that charge upfront — they are usually a second scam.
Looking for a regulated market to trade?
We show you the legal routes — with the same honesty as this page, and without pushing you toward any broker.