investigation of binary options fraud

Start, I'd like to give thanks Simona Weinglass of the Times of Israel for writing virtually this. I don't take time to visit every regulator'due south website every twenty-four hours. I'd besides like to thank FPA fellow member Keysha for sending me a message most information technology.

Hither's the total text of what the FBI has to say about Binary Options...

Binary Options Fraud
A Word of Alert to the Investing Public

Stock options. It'south a pretty common investment term meaning, in general, that one party sells or offers to another party the opportunity to invest by buying a particular stock at an agreed upon price within a sure period of fourth dimension. All perfectly legal and highly regulated—and if the investor takes advantage of the opportunity and the stock performs well, there's money to exist fabricated. And if the stock doesn't perform well, the investor knew the hazard.

Merely here'south another similar-sounding fiscal term that the public should be wary of—binary options. While some binary options are listed on registered exchanges or traded on a designated contract market and are subject to oversight by U.S. regulators like the Commodity Futures Trading Commission (CFTC), much of the binary options market place operates through websites that don't comply with U.S. regulations. And many of those unregulated websites are being used by criminals outside the U.S. equally vehicles to commit fraud.

Binary options fraud is a growing problem and one that the FBI currently has in its crosshairs. In 2011, our Internet Law-breaking Complaint Center (IC3) received four complaints—with reported losses of only more than than $20,000—from binary options fraud victims. Fast forward five years, and the IC3 received hundreds of complaints with millions of dollars in reported losses during 2016. And those numbers only reflect victims who reported existence fleeced to the IC3—the true extent of the fraud, which has victims around the world, isn't fully known. Some European countries have reported that binary options fraud complaints now constitute 25 pct of all the fraud complaints received.

What exactly is a binary option? It's a type of options contract in which the payout depends entirely on the event of a yep/no proposition, typically related to whether the cost of a particular asset—similar a stock or a commodity—will ascent above or fall beneath a specified corporeality. Dissimilar regular stock options, with binary options you lot're not existence given the opportunity to actually buy a stock or a article—yous're only betting on whether its price will be above or below a certain amount by a certain time of the day.

For example: You expect the price of an individual stock will be above $fourscore at 3:30 p.chiliad. today. So you buy a binary option that allows you to place this bet at a cost of $60. If, at iii:30 p.one thousand., the stock price is $fourscore.01, your payout is $100, for a profit of $xl. If the price of the stock at 3:30 is $79.99, you lose your $60. Of course, you tin purchase multiple binary options, which can significantly increase your winnings as well equally your losses.

So where does the fraud come into information technology? The perpetrators behind many of the binary options websites, primarily criminals located overseas, are merely interested in ane thing—taking your money. Complaints about their activities generally fall into one of three categories:

• Refusal to credit customer accounts or reimburse funds to customers. This is usually washed by cancelling customers' withdrawal requests, ignoring customer phone calls and e-mails, and sometimes fifty-fifty freezing accounts and accusing the customers themselves of fraud.
• Identity theft. Representatives of binary options websites may falsely claim that the government requires photocopies of your credit menu, passport, driver's license, utility bills, or other personal data. This information could potentially be used to steal your identity.
• Manipulation of trading software. Some of these Internet trading platforms may be reconfiguring the algorithms they apply in social club to purposely generate losing trades, often by distorting prices and payouts. For example, if a customer has a winning merchandise, the expiration time is extended until the trade becomes a loss.

Fraudulent binary options website operators go to great lengths to recruit investors. They advertise their platforms—often on social networking sites, various trading websites, bulletin boards, and spam electronic mail—with large promises of easy money, depression hazard, and superior client service. Potential investors are as well cold-called from banality room operations, where high-force per unit area salespeople apply banks of phones to make as many calls equally possible to offer "once-in-a-lifetime" opportunities.

What's being done to gainsay binary options fraud? The FBI currently has a number of ongoing binary options fraud cases, working with partners like the CFTC and the Securities and Exchange Commission (SEC). And this by January, the Bureau organized the 2017 Binary Options Fraud Pinnacle held at Europol in The Hague, bringing together law enforcement and regulators from throughout North America and Europe to discuss the growing binary options fraud problem.

Special Agent Milan Kosanovich, who works out of our Criminal Investigative Division's Complex Fiscal Crimes Unit, was i of the FBI's representatives at this gathering. "The superlative," he said, "gave all of united states the chance to sit down and talk nigh what nosotros've discovered through our corresponding binary options fraud investigations, where the challenges are, and how nosotros can all work together."

I of the biggest challenges police force enforcement faces, according to Kosanovich, is the fact that the scammers are sophisticated and have operations spanning multiple countries. "So the key to addressing this type of fraud," he continued, "is national and international coordination between regulatory agencies, law enforcement, and the financial industry."

Another important factor, said Kosanovich, is investor sensation and instruction. "Investors need to be aware of the significant potential for fraud on binary options websites, and they demand to brand sure they do their due diligence before e'er placing that get-go merchandise or bet."

What Tin You Do to Avoid Being Victimized

• Make sure that the binary options trading platform you're interested in has registered its offering and sale of its products with the SEC. (Registration provides investors with key information well-nigh the terms of the products being offered). To practise this, y'all tin apply the Security Substitution Commission's (SEC) EDGAR Visitor Filing website.
• Check to run into if the trading platform itself is registered as an substitution at the SEC'south Exchanges website.
• Ensure that the trading platform is a designated contract market by checking the Commodity Futures Trading Committee's (CTFC) Designated Contract Markets website. Thousands of entities promote binary options trading in the U.Due south., but only two are currently authorized to do so past the CFTC.
• Check out the registration status and groundwork of whatsoever business firm or financial professional you are considering dealing with. You can do this through the Fiscal Industry Regulatory Bureau's BrokerCheck website and the National Futures Association Background Affiliation Status Data Eye.
• Take a expect at the CFTC's Cherry Listing, which contains the names of unregistered foreign entities that CFTC has reason to believe are soliciting and accepting funds from U.South. residents at a retail level for, among other things, binary options.
• Finally, don't invest in something you don't empathize. If you tin can't explicate the investment opportunity in a few words and in an understandable manner, you may need to reconsider the potential investment.

Source: Investor.gov (SEC's Office of Investor Education and Advocacy/CFTC's Part of Consumer Outreach)

Original mail on the FBI website

Simona's Commodity in the Times of Israel

Source: https://www.forexpeacearmy.com/community/threads/the-fbi-warns-about-binary-options-fraud.49660/

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