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.
Between 2014 and 2019, the defendants reportedly operated fraudulent binary options trading platforms under names like BigOption, BinaryBook, and BinaryOnline. The ruling marks a significant step in U.S. regulators' efforts to clamp down on illicit online trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term schemes.
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 CFTC mentioned.
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.
Federal Court Orders International Enterprise to Pay Over $451 Million for Global Binary Options Fraud: https://t.co/8jGXdno5kE
— CFTC (@CFTC) January 29, 2025
Customers were promised "risk-free trades" and bonuses that came with hidden restrictions, making it nearly impossible to withdraw their funds, the regulator explained in statement today (Wednesday). 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 the 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. One defendant, Yakov Cohen, previously reached a separate settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term with the court, agreeing to return $7 million in illegal profits. The court also found Israeli citizens Yossi Herzog, Lee Elbaz, and Shalom Peretz liable for their role in the fraud.
In recent years, the agency has intensified its crackdown on binary options scams, warning investors about the risks associated with unregulated online trading platforms. In a separate case, dozens of Israelis were extradited to Germany, last year, in a case involving crypto and binary options scams that led to the loss of nearly 1 billion euros in five years.
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.
