Binary Option Scams in the Britian

Binary Option Scams in the UK

There has been something quite nasty that has been floating around recently that has been silently robbing Britons of millions of pounds of their hard earned money. It has been masquerading as an effective means by which fraudsters have stolen money from people who are the most vulnerable.

I am talking about binary options. This industry the has emanated from Israel and has spread to every corner of the world has used numerous sales tactics to pressure investors to invest in brokerages with these instruments. These were not even touted as trading products but as “investments” that could make people alot of money.

They have caught the attention of numerous law enforcement agencies as they have determined that these operations are sometimes used as a front to launder millions of dollars. They are also able to operate through a range of holding structures which means it is hard to locate who exactly they are and who controls them.

What are Binary Options

Binary Options were essentially an exotic option variant that were first created by investment banks as a way to profit from binary outcomes. Unlike with traditional options, the payoff is capped at the amount of the payout. With a standard American Option, there is an unlimited upside.

These were mostly traded by these investment bankers and hedge funds as an exotic instrument and were generally viewed as quite a complicated instrument to price. Hence, they were never really as popular in the institutional market as traditional options.

That was of course until they were picked up by the ex-online casino and scam forex brokers. They found that it was relatively quite easy to market the instrument to the retail market as they were quite gullible to what they were. Little did they know what they were getting themselves into.

Unregulated and No Oversight

When there is no oversight over operations such as this then there is a whole host of scope for nefarious activity. This is exactly what happened in the UK with these unregulated binary options brokers.

Most of the citizens in the UK did not know how to locate UK regulated option brokers and as such were duped into thinking that these brokers were legitimate or somehow allowed to offer their services to people in the UK.

Not only did these brokers make the clients think that they were offering them a safe investment but they also used fake names and claimed to be calling from London. They also claimed that they were all ex investment bankers and were senior brokers at the firm.

If this sounds like something out of the wolf of Wall Street then it most likely is. It was known that a number of these brokers used similar boiler room tactics to those individuals in movies like that. Not only did they lie about who they were but also about how Binary Options could be used.

They were told by all of these brokers that the options were risk free investments. They were told that they would never lose money and that they could make up to 500% per week. Some of them were also made to think that this was an investment that was safe enough to invest their retirements into.

The Range of Victims

There were so many victims of the scam that it would be hard to count. There were numerous pensioners who sold out of their retirement to invest in binary options. There were teachers, students and many others.

Someone they all seemed to think that the tactics that were used by the brokers were supposedly so convincing that they should trust them and invest this money.

Then, once they invested the money that was when things went sour. Not only did the returns not materialize as they may have hoped but they were told that the game was actively rigged against them. The platforms were designed to lose money and the brokers used dubious legal clauses to restrict the withdrawals of the clients.

The end result was a great deal of misery and alot of people who were left with a sour taste in their mouth as well as being a lot poorer. There were even reports that some had taken their lives as a result of the fraud.

Current Regulations

Binary Options are not regulated in the UK by the FCA but are rather regulated by the UK gaming commission. Hence, it is hard for consumers to request any sort of protections from the brokers who use these tactics.

Moreover, these brokers operate from abroad and not within the borders of the UK. This means that it is hard to prosecute them is they intend to sell their products to those who are located in the UK. The regulators have an uphill challenge.

However, this is something that may change as the FCA has already indicated their intent to regulate these options. They sent a RFP out to a number of people in the industry looking for information on the current state of affairs and how people should think about regulating these operations.

Hopefully when the FCA starts 2018 they will have rules in place around how these brokers can operate. Already we have seen some enforcement in the city of London as a number of smaller operators that have run bucket shops were raided. Things are indeed becoming a lot harder for the scammers to operate.

Trading Cryptcurrencies vs Binary Options

Although you do have some people who like to label cryptocurrencies as a “scam”, they have a fundamental misunderstanding of exactly what they decentralized currencies are. They are nothing compared to a vast industry with numerous unethical fraudsters who call up grandmothers in the UK and get them to lose.

Cryptocurrrencies are a phenomenon that are upheld by everyone. They are not controlled by a particular entity. They cannot be a scam. If this was indeed the case then everyone in the world would have to be in on the scam.

Trading Cryptocurrency vs. Options

This is the reason why Transforming Finance thinks that cryptocurrencies are the only way in which you can really participate in retail trading without having to fall for the unfortunate side effects of chasing wealth. The reason that people were able to fall for Binary Options is because they wanted money and were lured by promises of immense wealth. If you really want to trade cryptocurrency derivatives then there are a number of avenues to do that without trading a scam product.

With cryptocurrencies, this is not the case. They have proven the technology to the world as people have noticed just how much this it is likely to disrupt traditional finance. Hence, as an individual you are better off to invest in the underlying technology rather than investing to just make money. Focus on an idea and not the money you want to make.

Why Craig is not Satoshi

Why Craig Wright is not Satoshi Nakamoto

Craig Wright, an entrepreneur from Australia is having everyone believe that he is the author of Bitcoin’s whitepaper and protocol, Satoshi Nakamoto. Although a great number of people believe that Dr. Wright is not Satoshi, some people including Bitcoin partners and investors still claim that Craig Wright and Satoshi Nakamoto is the same person. With the news hitting the public that Craig Wright might be Satoshi Nakamoto it stirred up some waves within the Bitcoin community.

Gavin Andersen was one of the individuals who believed that Craig is Satoshi after all. The core Bitcoin developer, Gavin said that after a convincing email providing proof, he had no choice but to fly to London and meet Craig Wright in person. Gavin informed the community that after a while getting to know Craig he was certain that he is without a doubt Satoshi.

Ian Grigg, another Australian entrepreneur, and cryptographer is also 100 percent certain that Craig is Satoshi. With big names in the Bitcoin industry supporting Craig’s statement, the majority of people still say that they won’t be fooled until they see legitimate proof, which Craig Wright has refused to share with the public. All though there are some articles and interviews backing Craig’s statement, sceptics and journalists say that nothing yet can prove Craig Wright’s statement to be true.

He Cannot Prove it

Gavin Wright also chooses to whom he reveals evidence as to why he claims to be Satoshi, and this has led to people believing that Gavin’s audience lacks the expertise to see through his illusion. Back in 2015 Gavin Wright even tried to prove he is Satoshi by signing in with the same log in key which Satoshi uses, however, expert Greg Maxwell did some digging and found out that the keys have been tampered with beforehand.

Recently Gavin tried again to prove he is Nakamoto by using an old key that was used by Satoshi himself, by saying that the key used is newly generated. The login was valid and Gavin was granted access, unfortunately, this showed everyone that Gavin used an old existing key instead of using one of Satoshi’s private and unique keys. If Gavin had used a private key it would have been proof that he might, in fact, be Satoshi Nakamoto.

Craig Wright Fraud

By signing in with Satoshi Nakamoto’s signatures and information experts have stated that Gavin Wright is deceiving the Bitcoin community as all of his digital scripts lack a proper Satoshi signature. Gavin Wright was also asked that if he is Satoshi then transferring coins between Satoshi’s accounts would be a piece of cake, and once again Gavin refused to do so.

“Think of Gavin Wright busy driving a car, even though Gavin is driving the car there is no indication that he owns it until he shows the proper paperwork which he refuses to do.”

Bitcoin enthusiasts, investors and a lot of major cryptography experts said that they will not believe Gavin Wright is Satoshi Nakamoto until real proof is presented which at this stage looks very unlikely to happen.