Realizing that, as with casinos, “the house always wins,” over the past decade entrepreneurs have formed hundreds of binary options companies. First, they lease sophisticated “platforms” from web companies with roots in the online gambling industry. Next, they build fancy websites and hire fast- talking sales people. Here is where some companies go astray: They instruct the sales force to adopt false identities, and purport to be licensed brokers. They start by asking you to invest only $250. Surprise…you always win. Then they pressure you to increase your investment to the thousands, bringing you to a “VIP” level or other extravagant sounding names for “exclusive clubs.” Glorious names for simple traps. These operations bring millions of dollars into the coffers of offshore corporations, which are in a maze of other offshore entities, trust accounts and nominee shareholders – as if anti-money laundering laws never existed. Are all binary options companies fraudulent? Not at all. Some are licensed and regulated and operate honestly.
FACTS
- Nearly 90% of all binary options companies have israeli roots and offices
- Sales staff of binary options companies use fake names and fake addresses when communicating with their customers
- Most binary options companies are not licensed or regulated anywhere
- Almost none of the sales staff of the binary options companies are licensed securities brokers
- Many binary options companies ignore bans by governments from selling binary options to their residents
- Binary options companies make it very difficult for their customers to withdraw their money; sometimes these companies simplydecline it and go silent
- Conclusion: Binary options’ scam victims need aggressive legal representation to attempt recovery of their funds.