History of Binary Options Industry
We all know the horrors of the unregulated binary options companies, their immoral practices and pressure tactics. In light of a new public service announcement videos from the Commodity Futures Trading Commission (CFTC) we wanted to go back into the history behind this industry, how it started and why it was not stopped quicker. The CFTC video is in two parts, both very informative with personal testimony of how innocent, intelligent people got swept up in the billion-dollar binary scam.
Binary options are a way of betting on the future price of almost anything you can think of, but mainly commodities and foreign exchange. It is simple in theory; you bet on the price of a said commodity rising or falling – your options as an “investor” are binary – either put or call. This makes binary options trading an attractive, and more importantly, simple prospect to even the least informed of financial traders.
Many people are scared off with the complexities and nuance involved in regular commodity or stock trading. With binary options the system is simple, the potential for mass appeal was always there, it just needed a push in the right direction, then came 2008.
Having been around for many years but only available and accessible to the few, it was the US SEC’s approval for exchange trading in 2008 that opened the door to the general population. A few months later the financial crisis that started in America had a huge effect on the global economy and as interest rates dropped to prolonged record lows, those that did have some money were actively looking for anywhere to put it but the bank. This phenomenon, coupled with the internet 2.0 – the internet of things, made binary options not only an attractive investment opportunity compared to the stagnant banks around the world, but also offered easy to use and navigate platforms so even the most tech-phobic person would feel comfortable trading binary options.
Added to these external factors is an aggressive sales force, clickbait marketing and a trading platform that can be manipulated from within and what resulted was a new international digital derivative industry that got out of control thanks to lack of regulation and greed.
Now those victims of binary options scams are fighting back to recoup the money that they lost. The large majority of these unregulated binary options companies are based and/or operated out of Israel, so it only makes sense that Israel would be at the forefront of bringing down this corrupt industry.
Israel – The Solution Comes Out of the Problem
The binary options industry has become more than just a blemish on Israel’s international reputation, it is becoming an eyesore. The scale and exposure of the industry in Israel has made it too big to ignore. The chairman of the Israel Securities Authority, Shmuel Hauser commented recently saying that “Any way you look at it, as a human being, as a citizen, as a regulator, as a Zionist, as a father, and as a grandfather, it looks awful to me.”
The start-up nation has become one of the main international hubs for technological advancement and development over the past 20 years.
What many people don’t realize is that in addition to the creating and developing of new tech ideas and products, Israel is also at the forefront of online marketing and search engine optimization (SEO). The affiliate business model that has taken over the gambling industry (and many others, just to a lesser degree) can be easily cloned for the binary options industry.
In fact, there is very little to change from the affiliate side in order to direct your traffic (viewers who click on the advert you place around the internet) to a binary options trading site rather than an online gambling site. The online gaming industry has blown up over the last decade, with many of the companies operating in Israel.
This business model, where the affiliate that sent the customer can get paid as a percentage of how much the customer lost is a more profitable endeavor for the affiliates than even the online casinos. From the point of view of the affiliate company sending traffic, they can (and no doubt do) plead ignorance that they were not aware of the unregulated nature of the company that they were sending their traffic (people) to.
As the industry grew, so did the structure. After all, why outsource the traffic when you can do it yourself? Some of these operations incorporate all aspect of the customer journey, making sure to separate corporate entities to give the illusion of distance and plausible deniability when the inevitable comes.
For example, one binary options company which is currently in the process of a class action lawsuit from defrauded clients appears to be linked to both a Mauritius based marketing company – Linkopia and Israel based Yukom, both owned by the same individual.
It is this convoluted and complex business structure that has made it difficult for the people that have been scammed to firstly track, and secondly recoup the money that was taken from them. This is why many victims of binary options scams have turned to companies such as Wealth Recovery International (WRI) to assist them in getting their money back – and they’re succeeding!
Wealth Recovery International – A shining light for those left in the dark
One of the victims of unregulated binary options who turned to WRI for help was UK citizen and NASCAR XFINITY racer Stephen Young. Stephen lost $63,000 over the course of seven months with two binary options trading companies; Magnum Options and Boss Capital.
Thanks to Wealth Recovery Int. Stephen recovered 100% of his money back. Wealth Recovery Int. saw this an opportunity to spread their message to a wider audience, and Stephen was so happy with service he received he decided to take them on as sponsors for his recent NASCAR races, hoping to raise awareness to others out there in a similar position that might feel they have nowhere to turn.
Stephen’s story is an all too common, and without the right exposure, many victims of this sophisticated scam will never realize how they really lost their money.
The best possible scenario for a binary options scammer is to make the victim think that they lost their money genuinely. The worst possible scenario for a binary options scammer is a company like Wealth Recovery.