SpotOption – The Hidden Binary Options Empire

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This story was published in partnership with The Daily Mail. Their version can be found here. Thousands of British people have lost millions of pounds to an international scheme that is sold as an investment opportunity but in reality is a gamble or straight-up scam.

While other countries have banned this business, a regulatory loophole has left UK victims completely unprotected — despite police saying it is now the biggest fraud in Britain. The binary options review uk ford of what are known as binary options involves betting on whether financial assets, such as shares, currencies or commodities, will rise or fall over a specific time period.

Victims are targeted by salespeople in call centres abroad — typically located in Israel and Romania — who use high-pressure tactics to convince them to invest. They are then led to believe that their investment is growing as bets are placed — but when they try to cash in their purported returns they are unable to. The Bureau spoke to dozens of people across the UK who had been targeted by a range of different companies. Many people have had money taken off their credit cards without consent — in some cases thousands of pounds.

Hundreds of binary options companies exist around the world, making billions of pounds a year. Software is used which allows clients to check their purported account activity online, showing their funds rising and falling as the bets are supposedly made. There have been no successful prosecutions because the fraudsters are usually located abroad.

But the Gambling Commission only regulates operators that have equipment based in Great Britain. Many binary options firms operating globally are completely unregulated. Others register themselves in Cyprus, where the central bank allows financial companies from other countries to apply for operating licences, and where the trading is classed as investment rather than gambling.

The firms can then operate anywhere in the European Union EUexcept where individual countries have introduced restrictions. The Bureau has seen internal documents from some of the companies listing the names of hundreds of UK victims and how much they have lost. Typically people invest small sums to start with and are then drawn in with a series of false promises. The only condition was he would have to wait eight months before taking out the money.

Inside Option sent him a letter guaranteeing that this would be the case on headed notepaper with a London address. All the payments were made on a credit card and George thought that meant he would be protected if it turned out to be a fraud. He watched the trades taking place on his Inside Option electronic account and it appeared that the more money he put in the better he did. He was told the trader who had set up the binary options review uk ford had left to look after his sick mother.

Then Inside Option said it would have to bring in its legal department to check the validity of the deal, and after that he struggled to get hold of them. He lost so much money on scams that he became even more vulnerable to new ones as he was desperate to make back his losses. The police declined to comment on the outcome of the investigation. Most victims did not want their names published, in part because they feared being targeted by new scams. The targets are typically older investors frustrated by binary options review uk ford interest rates, looking for a better place to put their money.

They are told that binary options are a conservative investment strategy. At the same time the fraudsters also target younger investors, drawn in by pictures circulating on social media of happy binary options investors with gold Lamborghinis and Ferraris, with fake profiles bolstered by purchased followers. Nearly a third of the people who go to the police are in their twenties.

The web of binary options companies around the world is in a constant state of flux. As soon as there are too many complaints about one firm it binary options review uk ford closed down and replaced by another. Even the larger and more legitimate operators in the sector have run into trouble. The US bars binary options firms from selling to consumers unless they are operating through registered exchanges and contract markets, of which only a handful of companies are.

The company, which says it has more thancustomers in more than 80 countries, has also been fined this year by its regulators in Cyprus. Following queries from media organisations including the Bureau, Southampton FC ended its partnership with Banc de Binary last week. Belgium brought in a ban on binary option companies targeting consumers last month, and France is also considering introducing an advertising ban. Israel bans the sale of binary options to its own binary options review uk ford but there is no law stopping them targeting foreigners.

The UK, on the other hand, has failed to take action, which has given traders a helping hand. Last year the insurance market Lloyds of London had to issue a warning that AA Option was falsely claiming to be insured by the institution, meaning depositors were covered for any losses they incurred.

No such insurance existed. The Bureau learned of dozens of investors who are now trying to get their money back. Even grander claims have been made by other companies.

Inside Option told one client the company was based in the famous Gherkin building in the City of London. One client which Inside Option told it was based in the Gherkin was even sent a copy of a fake lease agreement for office space in the building. It was previously registered in Anguilla, where last binary options review uk ford the regulatory authorities issued a warning to the public stating the company was not licensed to trade in binary options.

Last spring a young Englishman posted an Instagram video of himself singing and larking around in an office in the Electra tower, a storey block in the heart of Tel Aviv.

The man, Jonathan Baker, was born and raised in Birmingham before moving to Israel some seven years ago. His Facebook posts show how he tempted people into the business: When contacted by the Bureau Yedibaslar said he had worked for Express Target Marketing, not Inside Option, and insisted he was entirely innocent of any wrongdoing. Lorry driver Steve Taylor, 59, lost the money he had been saving for his wedding to partner Kim Innes after betting it on binary options. He went on to open an account with another company, AA Option, and then got a call from a salesman there.

That evening, he got an automated call from his bank — the Bank of Scotland — alerting him to suspicious activity on his account. The bank initially returned the money but once it established Steve had given AA Option his card details it took binary options review uk ford money binary options review uk ford again. After that Steve decided to withdraw the money he had placed with Inside Option.

It refused, saying that because he had a new bank card it could not be sure he was who he said he was, even after he had given the company clear proof. However this binary options story — unlike most — does have a happy ending. After being contacted by binary options review uk ford Bureau, Bank of Scotland said it would refund the couple with the full amount taken by AA Option. SpotOption is one of six major binary options review uk ford of binary option trading platforms, all of which are based in Israel.

It charges brands like Inside Option a percentage commission on its turnover. The Treasury carried out a consultation last year which considered whether binary options sellers should be regulated by the Financial Conduct Authority FCAbut no conclusions were published and no legislative changes have been brought about. If these companies were regulated by the Binary options review uk ford the regulator could warn investors against specific fraudsters — but many of the victims we spoke to say they want a complete ban on binary options firms selling to the general public.

Binary options are not currently regulated by the FCA so your investment is not protected. Melanie has been at the Bureau sincereporting on areas such as lobbying, health and social care and police response to rape.

Meirion is an award-winning journalist best known for investigations into Jimmy Savile, Trafigura, vulture funds and the 'fake sheikh'. Abigail reports on counter-terrorism, corporations in warzones and other international stories and was formerly the FT Beirut correspondent.

I have been scammed by a company in Bulgaria. Instead all of this was taken from my credit binary options review uk ford even though I had not authorised it.

The bank will not repay any of my money even though when it was pending I reported it to them. If you flushed your money down the toilet with a binary broker then just learn your lesson and move on, there is no money to recover, just scammers looking to take more of your money. He has so far failed binary options review uk ford get the money returned on his credit card.

Gold Lamborghinis and Ferraris The targets are typically older investors frustrated by zero interest rates, looking for a better place to put their money. A Facebook post aiming to recruit new binary options salespeople. Adopting British identities The UK, on the other hand, has failed to take action, which has given traders a helping hand.

Other binary options companies falsely claim on their websites to be regulated in Britain. But the Bureau has discovered Inside Option is actually operating from a call centre in Israel. Steve Taylor and Kim Innes Lorry driver Steve Taylor, 59, lost the money he had been saving for his wedding to partner Kim Innes after betting it on binary options.

The SpotOption platform SpotOption is one of six major providers of binary option trading platforms, all of which are based in Israel. Peter was binary options review uk ford involved in the embezzlement, but was convicted of forging signatures on cheques. Lack of UK action The Treasury carried out a consultation last year which considered whether binary options sellers should be regulated by the Financial Conduct Authority FCAbut no conclusions were published and no legislative changes have been brought about.

About The Authors Melanie Newman Melanie has been at the Bureau sincereporting on areas such as lobbying, health and social care and police response to rape. Meirion Jones Meirion is an binary options review uk ford journalist best known for investigations into Jimmy Savile, Trafigura, vulture funds and the 'fake sheikh'. Abigail Fielding-Smith Abigail reports on counter-terrorism, corporations in warzones and other international stories and was formerly the FT Beirut correspondent.

Nick Mathiason More by Nick Mathiason. Comments Elize Cohen May 1st, Himanshu Ipad Jul 7th, Keith Schultheiss Jul 12th, David West Jul 16th, Annelie Jul 17th, Tony Donnelly Jul 20th, Michael Jul 27th, Hung Trong Nguyen Nguyen Aug 1st, Sara Aug 3rd, Amykecik Aug 10th, Kane Aug 25th, Lucas Aug 25th, Williams Sep 2nd, Hartie Sep 4th,

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Even if you never heard of SpotOption, as a binary options broker, you have probably already deposited money with them. This is why you should know the firm. With this information, you will be able to understand who SpotOption is and how you should deal with the hidden empire of binary options.

This means they provide the software, the banking, and almost everything else that binary options brokers offer to their customers. There are only a few platform providers that create the systems that most brokers use, and SpotOption is one of the biggest of them. To understand the system, think of car brands. Most big car makers own several car brands. They develop a platform and use it for models with each of these brands.

While these models are different on the surface — they look different and have different interiors — the actual car is often identical. You get the same drivetrain and the same engine whether you buy an Audi or a VW, a Cadillac or a Chevrolet. In the s, the U. Despite the few car makers, there were many, many car brands — from Oldsmobile to Cadillac, and so on. This variety was mostly an illusion that sold cars build of identical components in different designs.

Many but not all binary options brokers are the result of a similar illusion. They are the brands of a few binary options makers. SpotOption does the same thing as General Motors, but with binary options. They offer the platform; binary options brokers add their designs and their branding. But that is all that the brokers do. As long as two brokers both use the SpotOption platform, it makes little to no differences which of the two you use. As you can see, this list contains everything that you need to start a brokerage.

All you have to do yourself is come up with a name and design a few details, SpotOption does the rest. In , SpotOption claimed to have brands or affiliates. These brands all looked different, but they were effectively the same broker. It is unimportant which of these brokers you choose, as soon as you deposit money with them, the money will eventually end up with SpotOption, and you will get your binary options, your assets, and your payouts directly from SpotOption.

The most prominent SpotOption platform was Banc De Binary, once the biggest binary options broker in the world. After legal complaints on three continents, Banc De Binary ceased its operations in early Other brokers that use the SpotOption platform are:. Of course, this list is incomplete, but you are probably dealing with a SpotOption broker when you recognize these elements:. SpotOption allows its customers to customise their trading platforms.

Every SpotOption customer will look a little different, and there is a pro-style trading platform with all the features and a light platform with fewer features and a cleaner look. Nonetheless, once you get a good feeling for the typical SpotOption look, you will quickly be able to recognise a SpotOption once you see it. At first, the technicalities of binary options trading can seem unimportant.

Who cares how a broker creates its trading platform, as long as it is a good platform, right? Well, not so fast. First of all, it is important to understand what is happening to your money. This is a huge difference, and it means that you have to investigate an entirely different company when you check whether you can trust the people who handle your money.

This is the business side. But there are much more reasons for why it is important to understand SpotOption and the business idea behind it. SpotOption is not the only platform provider for binary options.

Companies such as TechFinancials and TradoLogic offer similar services. The most popular brand of these providers is 24option, which sponsors soccer giant Juventus and partners with tennis legend Boris Becker. For a complete understanding of the binary options world, we recommend learning more about these providers, too. Here are those you have to know. In short, SpotOption is a questionable business. We recommend staying away from it. There are other binary options brokers out there, and you are much better signing with one of the legitimate ones.

For a list of government regulated brokers you can trust, we recommend taking a look at our broker list. As we already pointed out, SpotOption has recently faced legal issues.

Their most popular brand, Banc De Binary, had to close due to many governments cracking down on the service. To face these legal issues, SpotOption has created a new product called digital contract that is supposed to fulfil government requirements.

Digital contracts are basically a rebranded version of the old SpotOption service. They offer a few new modifications, for example a new payout and expiry model, but, so far, there is no indication that the service has become more trader friendly.

There is simply not enough data to judge the new SpotOption service yet. Therefore, we recommend being cautious. There are trustworthy brokers out there, so why use a service where you are unsure whether it is legitimate? SpotOption is a difficult topic. On the one hand, it has contributed significantly to the rise of binary options, which has also lead to the creation of many good brokers.

On the other hand, SpotOption in itself is a questionable business that boasts about how many of their traders lose all their money. We recommend staying away from SpotOption and its many brands.

Pick a trustworthy, government-regulated broker, and you should be fine. Our broker list is a good starting point for your search. The leading brands all create their own platforms — not relying on any underlying technology.