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SpotOption

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SpotOption
IndustryGambling and binary options
Founded2010, 2011 or 2016 (uncertain)
FounderPinchas Peterktzishvilly also known as Pini Peter
Headquarters
Ramat Gan, Israel
Key people
Moshe Avrahami, CEO[1]
Production output
$5 billion in trades (claimed) (2015[2])
ServicesBackend for 300 affiliates
Number of employees
150 (2016)

SpotOption was a privately held platform software provider based in Israel in the controversial binary option industry, which was banned in Israel starting in January 2018.[3][4] The firm announced that it has left the binary options business and is exploring other possibilities.[5] It had previously announced a downsizing of its operations in Israel and moving many functions to other locations.[6] The firm claimed to have 70 percent share in the market for binary options platforms, and charged binary options firms up to 12.5% of their revenues.[4]

The firm's office in Ramat Gan was raided in a joint operation between the Israel Police and FBI in January 2018. The FBI was searching for evidence in the case of Lee Elbaz. Elbaz, CEO of Yukom, a binary options broker, was accused of fraud. She was convicted of three counts of wire fraud and one count of conspiracy to commit wire fraud in August 2019, and in December 2019 sentenced to 22 years in federal prison. As of March 2020 restitution to victims was still being decided but a figure of $28 million was being considered.[7]

Pini Peter, owner of SpotOption said his company has left the binary options business and "I’m considering closing the company down altogether."[8]

On 30 January 2018 Facebook banned advertisements for binary options trading as well as for cryptocurrencies and initial coin offering (ICOs).[9][10]

Founding

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Sources disagree on the founding of the company. Bloomberg reports "Spot Option" at 7 Jabotinsky, Ramat Gan, Israel, was founded in 2011;[11] a location consistent with information from Companies House in the UK which list a founding date of 2016.[12]

The nonprofit public interest news organization Bureau of Investigative Journalism reports a unit in Israel appearing in 2010.[2] They also report that the founder and primary shareholder is Pinchas Peterktzishvilly, also known as Pini Peter, who was convicted on money laundering charges in 2005.[13] According to an advertisement for Banc De Binary, its CEO Oren Shabat Laurent was a founder of SpotOption.[14] Oren himself was embroiled in significant controversy surrounding hiring experts to obfuscate the truth about Banc de Binary and SpotOption's affiliate funnel online;[15] which effectively sees the latter create a range of affiliate funnel online products such as auto-traders, which in turn lure new depositors into placing funds at Spot Option's tied agents and brands.

Market positioning and controversy

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The firm claims that two thirds of the binary option dealers around the world use SpotOption, and that the firm has $5 billion annual trading volume. In 2015, the company's former CEO, Ran Amiran, said "SpotOption is the industry".[2] SpotOption and TechFinancials together supply trading technology to brokers with claimed $8 billion annual turnover.[16] SpotOption supplied brokerages including the now defunct Banc De Binary, formerly SpotOption's biggest client,[2] and smaller brokerages including itrader,[17] BDSwiss, OptionRally, Webitrader, and FXDD.[18]

In 2016, SpotOption claimed 300 brands or affiliates.[19] among them are:

  • Banc de Binary, once SpotOption's largest client, shut down in January 2017 after being fined or prohibited from operating in multiple countries on three continents.[20][21]
  • BD Swiss, also known as Banc de Swiss, a licensed brand of Keplero Holdings Ltd, fined €150,000 in December 2016 by CySEC, the Cyprus Securities and Exchange Commission.[22][23] BD Swiss has addresses in Cyprus and Germany, but not Switzerland.
  • The demise via self-inflicted gunshot wound of Canadian entrepreneur, Fred Turbide, was attributed to Spot Option powered 23Traders.com brand.[24]

According to the Bureau of Investigative Journalism, "PowerPoint presentations posted online by Hong Kong-based SpotOption sales manager Thomas Chang in 2016 and former Middle East sales manager Fakhri Husseini in 2013 told potential brokers that only 20% of people who invest in binary options ever get any money back after signing up."[2] SpotOption exhibited at the IFX Expo International held in Cyprus in May 2016. Their director of marketing, Tammy Levy, when asked about crackdowns by law enforcement, was quoted as saying "SpotOption is a technology company, okay? Everyone is responsible for checking regulation in the jurisdiction where they want to work. I am here to tell you what options you have technologically."[3]

In June 2021, a film was submitted as evidence in a civil case in Tel Aviv District Court alleging that a SpotOption insider revealed a fraudulent binary options scheme.[25]

Gambling using binary options

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At the 2011 iGaming Super Show, the company showed its platform to traditional gaming vendors, claiming it was compatible with industry regulations and profitable for operators. Peterktzishvilly (Pini Peter) said they intended "to bridge the forex and gaming industries".[26][27] The company appeared at numerous gambling industry trade shows including ICE Totally Gaming in London in 2014[28] and the American Gaming Association's Global Gaming Expo Asia 2015 in Macao, calling itself creator of "the perfect financial game".[29]

In May 2015, SpotOption launched its new Spot5 platform that would include new instruments called "digital contracts".[30] These were developed in order to meet new regulatory requirements. On 23 August 2017, the company announced their intention to launch a blockchain based trading platform for binary options called SpotChain, a new product which will raise money from the crowds to fund their operations.[31]

References

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  1. ^ Weinglass, Simona (9 August 2017). "Israel's coalition chief won't rush binary options ban to Knesset". Times of Israel.
  2. ^ a b c d e Newman, Melanie (14 December 2016). "80% losses guaranteed! Inside the murky world of binary options trading". The Bureau of Investigative Journalism. Retrieved 14 December 2016.
  3. ^ a b Stuart, Hunter (15 June 2016). "As victims pile up, the binary option industry parties in Cyprus". Times of Israel.
  4. ^ a b Wootfiff, Raoul (29 October 2017). "Israel gave taxpayers' money to key binary options firm to expand into China". Times of Israel. Retrieved 29 October 2017.
  5. ^ "Exclusive: SpotOption Officially Stops All Binary Options Activity". Finance Magnates. 18 January 2018. Retrieved 18 January 2018.
  6. ^ "SpotOption Shifts Focus to Global Branches". MarketWatch.com. PR Newswire Europe. 20 March 2017. Retrieved 21 March 2017.
  7. ^ "US prosecutors: Israeli binary options scammer should pay back $28 million". Times of Israel. Associated Press. 24 March 2020. Retrieved 6 April 2020.
  8. ^ Appelberg, Shelly (14 January 2018). "FBI Raids Tel Aviv Offices of Binary Options Platform Provider SpotOption". Haaretz. Retrieved 15 January 2018.
  9. ^ Frier, Sarah; Verhage, Jules (30 January 2018). "Facebook Bans Ads Associated With Cryptocurrencies". Bloomberg. Retrieved 7 February 2018.
  10. ^ Cornish, Chloe (30 January 2018). "Facebook and regulators move to halt cryptocurrency scams". Financial Times. Retrieved 7 February 2018.
  11. ^ "Bloomberg Private Company Profiles - Spot Option". Bloomberg News. Retrieved 14 December 2016.
  12. ^ "Companies House entry for Spot Option UK". Companies House (UK). Retrieved 14 December 2016.
  13. ^ Newman, Melanie; Jones, Meirion; Fielding-Smith, Abigail; Mathiason, Nick (20 September 2016). "Revealed: How Brits are losing millions to UK's biggest scam while the government stands by". Bureau for Investigative Journalism. Retrieved 15 February 2017.
  14. ^ "Banc de Binary First CySEC Regulated Binary Options Broker". Binary Options. 8 January 2013. Archived from the original on 12 January 2017. Retrieved 12 January 2017.
  15. ^ "Wikipedia vs. Banc De Binary: A 3-year battle against binary options 'fake news'". The Times of Israel. Retrieved 29 August 2017.
  16. ^ Tova Cohen; Luke Baker (27 September 2016), Mind the Gap: From Israel via London, an online gambling scam traps thousands, Reuters
  17. ^ Saks-McLeod, Andrew (20 November 2016). "iTrader saga continues". Finance Feeds. Archived from the original on 12 December 2016.
  18. ^ Segal, Gerald (10 December 2013). "FXDD launches binary options trading with SpotOption platform". LeapRate. Retrieved 25 August 2016.
  19. ^ "SpotOption - Some Brands". SpotOption. 15 February 2016. Archived from the original on 15 February 2016.
  20. ^ Cornish, Chloe (2 February 2017). "Inside the high stakes world of online investing: binary options". Financial Times. Retrieved 2 February 2017.
  21. ^ "Binary trading group winds down after regulatory issues". Financial Times. 12 January 2017. Retrieved 12 January 2017.
  22. ^ Patterson, Jeff (23 January 2017). "BD Swiss Holding settles with CySec for €150K after suspected breach of conduct". Finance Magnates.
  23. ^ "Reaching a settlement with CIF Bdswiss Holding Plc". Cyprus Securities and Exchange Commission. 23 January 2017.
  24. ^ "Fleeced by Israeli binary options firm, Canadian man dies by suicide". The Times of Israel. Retrieved 29 August 2017.
  25. ^ Erazo, Felipe (4 October 2021). "Insider Reveals an Alleged Fraudulent Binary Options Scheme from SpotOption". Finance Magnates. Retrieved 13 October 2021.
  26. ^ "SpotOption Presents at iGaming Super Show in Dublin", Entertainment Close-Up, 10 June 2011, archived from the original on 16 February 2017
  27. ^ "SpotOption Displays Binary Options Platform at iGaming Super Show, Dublin", Entertainment Close-Up, 11 June 2011, archived from the original on 16 February 2017
  28. ^ ICE 2014 list of exhibitors, ICE Totally Gaming, 31 January 2014, p. 12
  29. ^ "SpotOption". 2015 Exhibitor List. American Gaming Association and Reed Exhibition for Global Gaming Expo Asia. Archived from the original on 16 February 2017.
  30. ^ "SpotOption Launches New Product - FXaxe". FXaxe. 27 May 2017. Retrieved 27 May 2017.
  31. ^ "Exclusive: SpotOption Announces Blockchain-Based Trading via SpotChain | Finance Magnates". Finance Magnates | Financial and business news. 23 August 2017. Retrieved 29 August 2017.

Further reading

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