The FBI is in Israel for Binary Options.
Following in the footsteps of Wealth Recovery International, the Federal Bureau of Investigation (FBI) has decided to come to Israel in order to gather the intelligence needed to understand the real nature of the unregulated binary options industry. With over an estimated 90% of binary options companies being owned by Israelis and/or operated from Israel, it is self-evident why the FBI thought it was necessary to send agents to the Tel Aviv offices of those connected to this global crime-wave. The FBI came to Israel to speak with some of the technology providers and we ourselves have a large swamp of evidence against many of these same binary options platform providers.
The technology providers are in many ways the keystone of binary options fraud. Without, (at a minimum) the tacit approval of these technology providers, no binary options company could operate as they would not have the software (platform, dashboard etc.) in order to begin.
The technology providers essentially rent out their platform to the various binary options brands. In the industry this is called ‘white labelling’; They provide you with a turn-key solution, a functioning platform in which all you need to do is attach your brand logo and aesthetics to. Many binary options brands use the same technology company as their platform provider.
By pressuring the technology providers, the FBI are positioning themselves in the center of the unregulated binary options industry.
Not Just the Platform Providers
And not just the FBI, but other government agencies are also investigating how these binary options companies are set up and structured. The Financial Conduct Authority recently released a list of unauthorized binary options firms to assist in the tracking down and closing of these scam operations. The additional aspects of the biggest online fraud in the world include, but are not limited to: The affiliate marketers who drove traffic to the unregulated brands for huge profits, and the legal opinions provided by Israeli law firms, which are crucial in binary options brands meeting KYC (know your client) criteria in order to open merchant processing, bank accounts and own credit cards. A binary options company needs all three of these aspects in place to be operational.
This is the holy trinity of the unregulated binary options industry. With all three of these variables in place (platform provider, legal opinion allowing for functional banking and affiliate marketers to ensure a steady flow of traffic and new customers (“victims”), you too can operate an unregulated binary options company.
The legal opinions are in some cases not worth the paper that they are written on as the unregulated brand in question is often in violation of the legal opinion written. Legal opinions for binary options brands are required in order to ensure that the operators are acting ethically and lawfully within the remit of the law. That is why the opinion is usually detailed: highlighting the countries and jurisdictions in which the brand can and will operate. However, this doesn’t mean that the operators of unregulated binary options companies will abide by their own legal opinion. Even newer brands such as FM Capitals, which is owned and operated by CMT Global Trading (according to affidavits that we have obtained), target US citizens – something that no lawyer would include in a legal opinion as it is in clear violation of the U.S and Israeli law to target U.S citizens.
The legal opinion appears to be nothing more than a regulatory hoop that is needed to jump through in order to setup the company. Once the corporate entity is setup and operating, how much this legal opinion is adhered to, is another question completely. It appears that they will happily violate their own legal opinion in the pursuit of profits. When you are running a scam operation in the first place, potentially breaking multiple laws, why follow any laws? It is not a one-off case either. Founder of Wealth Recovery International, Austin Smith stated:
“It is astonishing when you search through the Panama and Paradise papers to find Israeli law firms and lawyers linked to so many binary options companies in Israel. These attorneys are the cause of the problem.”
THE FBI vs. The Binary Options Industry
Actions speak louder than words. It is clear from the actions of the FBI over the past six months that they are taking binary options fraud very seriously. The United States is notorious in protecting its citizens, no matter where the perpetrators of the crime are located or the jurisdiction they are in. It is illegal for binary options companies to solicit U.S customers without being authorized and licensed to do by the Securities and Exchange Commission.