Binary Options Industry
From the outside, it seems as though the binary options industry is going through a torrid time; platforms closing, Securities & Exchange Commission (SEC) warnings, publicly traded companies being forced to delist and a plethora of consumer complaints has caused havoc for the industry in recent months.
Is binary options a legitimate industry being tarnished with the brush of a few unethical actors or, is there a bigger, underlying problem in the industry as a whole? With so much misinformation out there, we wanted to understand what is really happening.
A few bad apples or an industry rotten to the core?
Binary options fraud is becoming an all too familiar story – a quick Google search of binary options fraud will show you story after story of people who have been victims of what seems like an elaborate and deceptive scam.
I personally was aware of some unethical practices, as in all industries, however, doing research for this article opened my eyes to the size and scale of the problem. The Federal Bureau of Investigation (FBI) found that some European countries have reported that binary options fraud complaints account for 25% of total fraud complaints received. This is a staggering number.
So, if the problem really is so big, how come very little action has so far been taken to tackle this (at least partly) corrupt industry?
The short answer is that it is very hard to find, and then locate the owners and individuals of unregulated binary options companies. Usually the most unscrupulous of actors will have international corporate structures specifically designed to obfuscate true ownership, and more importantly, make it challenging to any law enforcement agency, national or international to bring them to justice.
If you manage to navigate through the web of offshore companies and find the real owner, there is no current international law that will bring them to justice. What is needed is strong national laws in the countries where they operate, and a diligent legal approach.
The location of this showdown between legal authorities and the unregulated binary options companies appears to currently be taking place in Israel. Israel is the country where a large amount of these seemingly international binary options companies are based and/or operated from. It has become so successful that these fraudulent or shady industries account for a significant part of Israel’s prosperous high-tech sector revenue.
Israel & the scale of binary options fraud
Israel, perhaps the tech capital of the world after Silicon Valley, has been at the forefront of this current wave of anti-binary options news and updates that seem to be surfacing. Not only is Israel an international hub for some of the biggest tech companies in the world, but Israel is also a leader in influencing how we navigate the internet generally.
All online business, including binary options, rely heavily on being accessible and easy to find. Search Engine Optimization (SEO) is the key factor that affects this and it is critical to any online business in 2017.
It is this combination between the companies with questionable ethics and SEO companies with incredible influence that has created the situation we are currently in. Optimizing your search engine results means altering the natural Google search results to get your desired page ranked higher than it would “naturally” be. There is nothing necessarily sinister in this methodology, every online company in the world will do some sort of SEO.
What makes it dangerous to the average consumer is the combination of unethical company practices with an effective SEO strategy. Theoretically, if your SEO is good enough, you can make any page you desire appear where you want. This includes “pushing down” pages and results that you do not want to appear. This phenomenon came to its height with the now defunct binary options company Banc de Binary. You see, once you become an online business, you are susceptible to feedback and bad reviews.
Most companies will embrace this level of feedback and exposure as a way of highlighting just how good a company they are. However, when your business model is built on the notion of deceiving your clients, this feedback loop needs to be stopped or altered. Check out the Wikipedia Edit Wars to see the lengths that were taken to try and minimize the bad reviews and optimize the fake positive (usually done in-house) reviews.
Israel is also the place where action is being taken to bring down these unregulated platforms and traders, and return the money to those who have been defrauded. Spearheaded and assisted by intelligence gathering agency, Wealth Recovery International, lawyers in Israel are taking on cases to retrieve the money that was defrauded from the victims of binary options fraud.
The largest lawsuit against a binary options company was recently filed in a Tel Aviv District Court by Veronica Birman of Birman Law Firm. The $10m USD lawsuit was filed against the Israeli owner of Toro Media – the marketing entity of binary options brand OptionsXO.
Doing research for this article I was fortunate to speak to many people in the binary options industry and if what they told me is anything to go by, we should be expecting a lot more lawsuits of this kind in the near future.
The industry as a whole seems shook with the amount of exposure and future potential lawsuits. While there is nothing intrinsically fraudulent about binary options, the industry has become synonymous with years of greed, corruption and unethical practices. Without a centralized and independent regulator, we urge you to be careful before dealing with any binary options company.
Before you invest, check & check again.
Our advice is; like any other investment, do your due diligence before giving any of your money to anyone. When it comes to binary options fraud, here are a few tips to look out for to make sure you are not giving your money to an unregulated company.
The first thing to check is the regulation. The companies that are regulated will be happy and proud to show you their credentials. You should be provided with relevant links and documents that prove, beyond doubt, the legitimacy of the organization you are speaking with.
Due to the sophistication of binary options fraud, we would recommend checking this yourself regardless of how comfortable you feel – if it sounds too good to be true, it probably is. If you are in the U.S. you can do this easily by checking the company name at the sec.gov website with EDGAR company filings.
Don’t settle for checking only one aspect of a company. The binary options fraud industry is one that was built on SEO savvy principles with the purpose of making the said trading platform look legitimate. These affiliates and unscrupulous media companies go to great lengths in order to make it look like the product that they are promoting is legitimate. Their business model doesn’t rely on it being a real product. Don’t take one source as evidence, it is very possible it was paid for and put there by the same people who want to take your money.
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