The binary option scam: Evil Incorporated vs the "Don't Be Evil" corporation

All that is required for evil to triumph is for good men to do nothing

—Edmund Burke

Today I'm going to digress a bit from all things TurnKey related to shine a much needed light on a monster I found lurking in my backyard.

SCAM

I decided to write this post after being horrified this weekend to discover someone in my family has gone to the dark side, working in the heart of Tel-Aviv's ugliest billion dollar "industry": binary options scams.

If you aren't fully educated about binary option scams, the best source of information I've found is TimesOfIsrael's shocking expose:

An industry turning over hundreds of millions of dollars, employing thousands of people, is cynically cheating naive would-be investors worldwide via a range of corrupt practices. It is doing terrible harm to its victims, and it risks doing the same to Israel's reputation.

—Times of Israel: Israeli's vast, amoral binary options scam exposed

It's a very good read, as are the ongoing follow up articles, especially this one: Binary options: a scam that has to be stopped. Indeed.

TL;DR: binary options are an upgraded Nigerian prince scam. This isn't gambling dressed up as legitimate finance. That would be bad enough. No, this is organized crime. Scammers from Israel pretending to be well-trained financiers from respectable financial centers (e.g., London), soliciting funds for "low-risk investments", funneled into rigged one-way "online trading" platforms that make it easy to transfer money in, but next to impossible to transfer money out. Where winning is the same as losing. After they suck you dry, they just stop taking your calls. These companies make regulated gambling outfits look like social aid.

The TimesOfIsrael articles are insightful not just with regards to binary option scams, but also with regards to weaknesses that are allowing Google search results to be manipulated, and how a new kind of criminal organization is exploiting loopholes in the frameworks of International legal and financial networks to run predatory rackets through the Internet.

After reading the article I think I know how honest Nigerians must feel. This isn't business. It's economic terrorism. A hateful antisemitic fantasy come to life. The ugliest kind of destructive, predatory financial fraud, on a massive scale.

As a fellow Israeli I am deeply ashamed that my country is providing safe harbour to these organized crime syndicates, instead of putting the shameless sociopaths who run them behind bars where they belong.

This industry is a monstrous machine for transforming greed, fear and capital into distilled suffering. Suffering for the hundreds of thousands of deceived victims worldwide. Suffering for the thousands of employees, mostly young and foolish, tempted by easy money to sell their souls, auctioning off their values to the highest bidder.

I worry for my family member. One cannot be an active participant or even quietly complicit in evil without being corrupted by it:

There is no fortress so strong that money cannot take it

—Cicero

What should we do about this?

Sunlight is the best disinfectant

—Louis Brandeis

Fight disinformation with information. Spread the word. Link, tweet and share articles that expose the scam. Use "binary options" keywords in your links. If enough of us do that that will make sure the articles exposing this fraud are the first thing that comes up when someone runs a search.

This will help rebalance Google's search results which are currently undergoing active manipulation:

Israelis entirely legitimate expertise in Search Engine Optimization (SEO) is here being utilized in the sophisticated manipulation of Google's search engine, whereby the companies perpetrating the fraud turn up high on Google searches, the better to attract new clients. This creates a near information blackout, where both potential clients and potential employees have little idea what they’re getting into. So skilled is the industry in manipulating Google, indeed, that anyone trying to research the industry is directed to supposedly informative websites that are often run by corrupt firms and their affiliates.

—Times Of Israel, Binary options: a scam that has to be stopped

At the time of writing I can attest to the sad truth of the above myself. Google is one of my favourite companies, but it's currently failing the would be victims of this scam industry.

Remind Google not to be evil

A grassroots viral campaign to get the word out will do a world of good, but it may not be enough.

We also need to complain loudly to Google. It is profiting off of this "industry" by allowing these companies on its ad network and sponsored search results. Through this complicitness Google risks substantial damage to its brand and "don't be evil" reputation.

For example, the first time I googled for binary options my screen was filled top to bottom with 4 sponsored ads for binary option "trading platforms". These ads dominated the entire screen. I've never seen sponsored ads take up so much of a Google search results page before.

I had to scroll down to see the first organic result, which is a binary options company!

Googling for binary options scam leads to sites affiliated with binary options companies that are supposedly tracking the "bad apples". These sites are wallpapered with ads for "legitimate" binary options companies. A matryoshka doll of deception nested within deception.

How to tell Google what you think

A few options:

  1. Link to articles exposing the scam. Make sure to include "binary options" in the link text.
  2. Complain publicly on the Google search product forum.
  3. Send Google your private feedback on any search term by clicking on the "Send feedback" link at the bottom of the search results.

 

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Comments

But to put this in perspective...

- If you put your money in the bank in 1932 you would have made the same amount as investing in S&P500

- 75% of trades in the stock market are by computers

- The computers not only process it faster than we do...they get the information before we do!

- After tracking 15 years of investing pros: +7.2%, Dartboard: -1%, Market Index: -1%, Amateurs: -4% ...suspiciously that almost balances in the plus / minus column!

- Margin investing, Puts, calls and short-selling...how is this not gambling!

It's all gambling...even if you dress it up with a suit and tie and call it the stock market. Basically, the rich get richer...as always.

So while I agree the binary option scam is evil...at least it is a demon in demon's clothing rather than a demon in a nice suit like the stock market :-)

Cheers,

Tim (Managing Director - OnePressTech)

Liraz Siri's picture

I don't go for gambling myself but I don't have a problem with it per say. You go to a casino, you know you're playing the odds and there are some rules the house has to follow.

The binary options scam is much worse than gambling. First, it's marketed deceptively as a low-risk investment. Second, the platform is rigged. Third, even if you "win", you still can't withdraw your funds. They'll just stop taking your calls.

They dress everything up with terms borrowed from the investment world, but it's really a slightly more sophisticated version of the Nigerian scam in disguise, with better execution.

This is organized crime.

There is no question that this is gambling, the question is whether all organisations involved are criminal and how significant a problem it is relative to other bigger scams.

My point was that as a society we like to look at obvious gambling initiatives as criminal and miss the fact that the world's financial industry is devastating the world's financial system and no one seems to be going to jail. Arbitrage, naked short selling, puts & calls, collateralised debt (now Bespoke Tranche Opportunities), frozen assets in investment funds all part of the 2008 collapse. Governments (us as taxpayers) then covered the bet that the financial industry made and lost without our consent.

1) CDOs were marketed as "safe" investments in real estate by investment firms that knew that the underlying leverage was a ponzi scheme...few if any went to jail

2) Investment funds invested fully or partially in CDOs were forced to freeze withdrawls or wind up at pennies on the dollar.

Sound familiar. Take binary options and multiply by 1000 and you have the world's investment markets...smart well dressed people who roll from one borderline legal scam to another. A world high on leverage with government's willing to use our money to clean up the mess afterwards.

I'm not disagreeing that binary options are probably evil...I'm just pointing out that if binary options bother you to the point of writing a blog post about it...you should probably take a look at the world financial markets. The former is unlikely to directly affect your and our lives...the latter definitely is.

Just one man's two cents worth :-)
 

Cheers,

Tim (Managing Director - OnePressTech)

Liraz Siri's picture

Tim, I agree with you there are many things wrong with the financial system, that many parts of the system are corrupt and that it would be good to send more suitcase thieves to jail.

But markets are also incredibly valuable tools for allocating capital and determining prices.

With legitimate finance investors lose money because they ran into bad luck or didn't correctly anticipate risks, or didn't do due diligence on the public available information. If a company lies in their accounting and it gets caught, it gets shut down (Enron). If you trade on insider information and you get caught you go to jail (Martha Stewart). There are rules and regulations and agencies (SEC) to enforce them, which you can complain to. If you're on the winning side of an instrument (Salomon Brother's CDOs) the company pays you or it goes belly up. The system isn't perfect, and it doesn't guarantee a fair outcome, but it's not a free for all.

In a con like the binary options scam, anything that increases profits goes. The only regulation is the "financial compliance" that prevents customers from withdrawing their funds. There is no market. No prices influenced. No investors, or investments. No real underlying assets. Only victims and deceptive artifice. If you read the TimesOfIsrael articles you'll see that it doesn't matter if you win or lose. You can't check out. The whole thing is structured like a bear trap.

I hear you Liraz (I did read the articles you linked to...sad...but still an old wolf in new clothing). What I find worrisome is that while scams are mostly an issue for the unwary, there is the opportunity to be wary. If it seems too good to be true...it is. When the world's investment returns are rock bottom through deflation ANY organisation promising high returns is a scam. Caveat Emptor.

But the impact of scams is small from a global perspective and localised to the participants (and their unwary spouses of course)...the financial market shenanigans affect all of us even the hard working savers of the world who don't get sucked into the stock market bubbles and suspiciously high return investments.

Sometime in the 1980's governments of the world and its citizen's realised that while currency is fully controlled by governments credit and insurance is less controlled and open to rampant speculation. With leverage of 25:1 - 50:1 banks have lent out so much money that if you wanted to withdraw your money from the bank you couldn't unless you were the only one.

It used to be that one country's stupidity was localised to that country and their external investors. The country would print money to raise inflation to lower the true cost of their debt at other countries' expense and dig their way out. That no longer works because every country has massive debt(when did Argentina become the benchmark for fiscal restraint) and interlinked collateralised debt means the world sinks together. Don't ask me how all the world can be in debt...that means we're in debt to ourselves or, more likely, the wealthy of the world. As someone who has savings in the bank...I know how my country will pay off the country's debt if pushed to the wall!

That's why, at 56, I have recognised that over the next 30 years only money from active ventures is likely to hold purchasing power irrespective of the world' financial state. Pension and savings may still be around with watered down value but I don't think we can bank on it. So I started OnePressTech to supply Managed Office Clouds based on Turnkey Linux with a pricing model tuned to the financial climate of the times.

Any takers on a TKLX bitcoin appliance :-)

PS: Sorry Liraz...didn't mean to hijack your original post topic...it just struck me when I was reading your original post that we all rail against the injustices of the scammers but seem societally oblivious to the greatest scams of the century occuring under our noses in our financial markets until it is too late.

Cheers,

Tim (Managing Director - OnePressTech)

Liraz Siri's picture

Tim, I'm actually a big Bitcoin supporter, for many of the reasons you stated. It's why I quietly took over maintenance of BlockExplorer a couple of years ago from Theymos, the Bitcoin forums and reddit moderator.

Yes, there are probably bigger problems in the world than binary options scams. Global warming & environmental destruction, repressive regimes, war & famine, the refugee crisis, the death of millions by preventable diseases, and yes - a dangerously crash-prone and unjust international finance system based on fiat currencies under opaque centralized control...

But to keep our society healthy enough to battle the big issues we need to care about its other ills as well. To do otherwise would be like sending every single soldier to the most important battle, leaving everywhere else undefended. You'll win the battle but lose the war. Evil is a hydra monster. By the time you're done cutting off the largest head all the smaller heads will have grown to replace it.

So even if you could redirect every discussion to The Most Important Issue I don't think that kind of exclusive attention would be a good thing.

Corruption and moral decay are dangerously malignant. We should strive to nip evil as close to the bud as possible. Big problems start as smaller problems. An ounce of prevention is worth a pound of cure.

Emil Rusanov's picture

ASKoption is a BIG SCAM. YOU WILL NEVER GET THE MONEY THEY WILL OWE YOU!
 
They approved my withdrawal of  £8575 (£5000. 00 I have invested), but I never received my money!
 
I have reported askoption to the police, companies house, FCA (Financial Conduct Authorities). ASKoption is under investigation now!
VladGets's picture

its super information

What the side of the page?

edward's picture

If you know you have lost above 1000 USD/EUR and you lost all by trading due to unfair trades or Manipulations by your Broker, kindly let me know so you can get your money back directly from your broker Via the regulatory body, because your money was supposed to be insured, this is applicable to both Binary and Forex traders. 
I have helped a lot of people get back their funds and i won't stop until i help many more facing this challenges and be satisfied. I will help you get the full funds back in one week, this can only be done if your broker is among regulatory broker laws. Post here so I can guild you through on what will be done.

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