A federal court has dealt a major blow to an
international fraud network that deceived investors through fake binary options
platforms. The U.S. District Court for the Northern District of
Illinois ordered five offshore firms and three individuals to pay over $451
million in restitution and penalties after they were found guilty of defrauding
customers worldwide.
The ruling marks a significant step in U.S.
regulators’ efforts to clamp down on illicit online trading schemes. Between
2014 and 2019, the defendants operated fraudulent binary options trading
platforms under names like BigOption, BinaryBook, and BinaryOnline.
Court Ruling and Financial Penalties
Through websites, emails, and phone calls, they
convinced customers—many in the U.S., that they could earn significant profits
trading binary options. In reality, most investors lost their money.
The fraudsters went to great lengths to appear
legitimate. They misrepresented their identities, financial expertise, and
locations while using aggressive sales tactics to lure victims.
Customers were promised “risk-free trades”
and bonuses that came with hidden restrictions, making it nearly impossible to
withdraw their funds. The firms also manipulated trading platforms to ensure
that clients would lose money on trades.
The court found the defendants guilty of fraud and
other violations of the Commodity Exchange Act (CEA). They are now required to
pay $112.9 million in restitution to victims and an additional $338.7 million
as a civil monetary penalty. The ruling also permanently bans them from trading in
CFTC-regulated markets or registering with the commission.
Affected Companies
According to a statement by the CFTC, the convicted
entities include Yukom Communications Ltd. (Israel), Linkopia Mauritius Ltd.
(Mauritius), Wirestech Limited (Marshall Islands) doing business as BigOption WSB
Investments Ltd. (Multiple jurisdictions) doing business as BinaryBook, and Zolarex
Ltd. (Marshall Islands) doing business as BinaryOnline
The case originates from an August 2019 complaint
filed by the Commodity Futures Trading Commission (CFTC). One defendant, Yakov
Cohen, previously reached a separate settlement with the court, agreeing to
return $7 million in illegal profits.
In recent years, the agency has intensified its
crackdown on binary options scams, warning investors about the risks associated
with unregulated online trading platforms.
Many fraudulent firms operate under different names
and move funds across multiple jurisdictions to evade detection. The regulator
has urged investors to conduct due
diligence before engaging with any online trading platform.
A federal court has dealt a major blow to an
international fraud network that deceived investors through fake binary options
platforms. The U.S. District Court for the Northern District of
Illinois ordered five offshore firms and three individuals to pay over $451
million in restitution and penalties after they were found guilty of defrauding
customers worldwide.
The ruling marks a significant step in U.S.
regulators’ efforts to clamp down on illicit online trading schemes. Between
2014 and 2019, the defendants operated fraudulent binary options trading
platforms under names like BigOption, BinaryBook, and BinaryOnline.
Court Ruling and Financial Penalties
Through websites, emails, and phone calls, they
convinced customers—many in the U.S., that they could earn significant profits
trading binary options. In reality, most investors lost their money.
The fraudsters went to great lengths to appear
legitimate. They misrepresented their identities, financial expertise, and
locations while using aggressive sales tactics to lure victims.
Customers were promised “risk-free trades”
and bonuses that came with hidden restrictions, making it nearly impossible to
withdraw their funds. The firms also manipulated trading platforms to ensure
that clients would lose money on trades.
The court found the defendants guilty of fraud and
other violations of the Commodity Exchange Act (CEA). They are now required to
pay $112.9 million in restitution to victims and an additional $338.7 million
as a civil monetary penalty. The ruling also permanently bans them from trading in
CFTC-regulated markets or registering with the commission.
Affected Companies
According to a statement by the CFTC, the convicted
entities include Yukom Communications Ltd. (Israel), Linkopia Mauritius Ltd.
(Mauritius), Wirestech Limited (Marshall Islands) doing business as BigOption WSB
Investments Ltd. (Multiple jurisdictions) doing business as BinaryBook, and Zolarex
Ltd. (Marshall Islands) doing business as BinaryOnline
The case originates from an August 2019 complaint
filed by the Commodity Futures Trading Commission (CFTC). One defendant, Yakov
Cohen, previously reached a separate settlement with the court, agreeing to
return $7 million in illegal profits.
In recent years, the agency has intensified its
crackdown on binary options scams, warning investors about the risks associated
with unregulated online trading platforms.
Many fraudulent firms operate under different names
and move funds across multiple jurisdictions to evade detection. The regulator
has urged investors to conduct due
diligence before engaging with any online trading platform.
This post is originally published on FINANCEMAGNATES.
