Court orders operatives of crypto, binary options scam to pay $7 million

abdelaziz Fathi

The binary options industry has been in the news again as the US derivatives regulator hits several marketing firms and their operators, mostly based out of Israel, with a combined $7 million fine for operating a fraudulent trading scheme.

binary-option-frauds

Today, the CFTC has obtained a permanent injunction from the U.S. District Court for the Southern District of Florida against Daniel Fingerhut alongside Itay Barak, Tal Valariola and their company Digital Platinum Limited (DPL).

On regulatory grounds, these names were sued for operating binary options and cryptocurrency scam that defrauded investors to the tune of $15 million. They were working with a few brokers and marketed extravagant lifestyles, which they claim to have earned via online trading.

The case involves two massive solicitation schemes that had been running from October 2013 to August 2018, one involving binary options and the other digital assets, the CFTC said.

The binary options defendants were named as Tal Valariola and Itay Barak, both from Tel Aviv, and were charged with operating an Israel-based marketing company, Digital Platinum Limited (DPL). The agency says their business allegedly “aided and abetted” an offshore company called All in Publishing (AIP), which was accused of marketing fraudulent binary options to American and foreign investors on behalf of their associated brokers, who paid AIP and DPL commissions.

The regulator said the promotional content produced by these fraudsters was viewed millions of times and caused more than 60,000 people to open accounts to trade binaries, forex, metals, cryptos, among other assets, with their unregulated brokers.

The complaint also names a Florida resident, Daniel Fingerhut, who was charged with creating the fraudulent solicitations related to binary options on behalf of AIP. Fingerhut also managed Digital Platinum Defendants’ affiliate marketing program during this time. He was also part of the crypto scheme where investors were lured into the associated broker with the promise that they could use algorithmic trading software or a “bot” that would trade for them.

“The orders find that Fingerhut, Barak and Valariola created, disseminated and/or facilitated the use of fraudulent solicitations in emails, websites, and video sales letters promising free access to purportedly successful automated trading systems that traded on behalf of clients in binary options involving commodity interests and digital assets. These solicitations misrepresented hypothetical and fictitious trading results as real results, and used fabricated customer testimonials,” the CFTC said.

 

Read this next

Digital Assets

Russia could use cryptocurrency in international payments as sanctions intensify

Faced with stiffening sanctions over its invasion of Ukraine, Russia is reportedly mulling the idea of accepting Bitcoin or other cryptocurrencies as payment for its international trade. Interfax news agency first reported the news on Friday, citing a high-ranking government official.

Digital Assets

Huobi buys crypto exchange Bitex to expand in Latin America

Huobi, the world’s sixth-largest crypto exchange by trading volume, has bolstered its commitment to Latin America with the acquisition of Bitex.

Digital Assets

US Senate to ban Google, Apple app stores from hosting China’s e-CNY

The US Senate could pass new legislation to ban hosting China’s e-CNY – also known as the digital yuan – by US app stores like Apple store, Google Play, and other providers.

Institutional FX

Takeprofit Tech adds Gate.io, GCEX and others to Liquidity Hub

Fintech software developer Takeprofit Tech has onboarded Gate.io, MFP Trading, Velocity Trade and GCEX to its liquidity hub solution network.

Digital Assets

Bosonic launches clearing and settlement solution for digital assets

Bosonic launched a clearing and settlement capability which provides a turnkey digital asset infrastructure platform that can be used by market operators to run their own trading venue or digital asset post-trade service.

Metaverse Gaming NFT

Immersive technologies: How VR technologies can boost our well-being

Neuro-biologists have already proven that the human brain can’t tell the initial difference between reality and deep fantasies. It works for both dreams and daydreaming. In other words, if our brain perceives something as real, we react to it as if it was true. That is why emotions we get in the skillfully-built immersive reality can be a substitute to those we get in real life. 

Digital Assets

LevelField taps METACO’s digital asset custody platform ahead of US bank charter

LevelField is comprised of career bankers who deeply understand the importance of compliance and security.

Digital Assets

JPMorgan Chase invests in crypto forensics startup Elliptic

Multinational investment bank JPMorgan Chase & Co has joined the Series C funding round for Blockchain forensics startup Elliptic, the latest sign of how major banks are warming to cryptocurrencies.

Digital Assets

Alex Iakobachvili parts ways with B2Broker to join GCEX

GCEX, a digital asset and FX technology platform for institutional and professional clients, has appointed Alex Iakobachvili to the role of Vice President of Business Development.

<