Wirecard Involvement In Illegal Binary Options Schemes (Part I)

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FinTelegram has been taking action against the illegal broker schemes since early 2018 already. The US FBI estimates that retail investors were cheated with binary options as only one product of these illegal brokers by USD 10 billion per year. Binary options are now banned in most jurisdictions, but between 2010 and 2018 this segment was gigantic and left hundreds of thousands of harmed investors behind with dozens of billions of dollars lost. The legal proceedings have only just begun in Europe. According to legal experts, the payment transaction providers involved in these illegal broker schemes are to be qualified as co-conspirators and to be held liable accordingly.

Wirecard – Payment Services Partner To Illegal Broker Schemes

As part of the EFRI initiative, FinTelegram has discovered several regulated payment services providers (PSP) that have facilitated these illegal broker schemes. Among those PSPs was the German Wirecard, one of the leading public companies in Germany.

Wirecard was apparently involved on a large scale in the processing of the illegally obtained and hence illicit funds (fulfills the definition of Money Laundering) in this space of unauthorized brokers. Especially in the binary options segment which was a huge illegal industry between 2010 and 2018. Meanwhile, binary options are prohibited in most jurisdictional regimes. Financial regulators have recognized the fraudulent nature of the business.

As a matter of fact, 99% of binary options brokers have been illegally operating bucket shops, i.e. a (virtual) place for making bets on current exchange prices of securities or commodities, but without any actual buying or selling of the assets. The bucket shop operator (i.e. the binary options brokers) plays the bank as in casinos. The traders always play against the fictitious broker. Binary options are genetically prone to fraud and hence banned in most jurisdictions as a form of gambling.

As so-called acquirer for Visa and MasterCard, Wirecard accepted these illegal bucket shops as merchants in their network. FinTelegram and EFRI have so far been able to confirm Wirecard‘s involvement in two major illegal broker networks based on payment documents received from victims of these schemes.

Platform Providers And Brands

The German Wirecard was involved in the illegal broker network of the now arrested German Uwe Lenhoff and his Altair Entertainment, and on the other hand, it served the largest known binary options network around the Israeli SpotOption. This company was the leading developer of binary options trading software. Numerous illegal brokers were operated as so-called white label solutions with the SpotOption platform. Besides operating the software platform, the SpotOption guys operated their own illegal broker schemes using different labels.

These included, for example, GlobalTrader365 (www.globaltrader365.com), VaultOptions (www.vaultoptions.com), or VipBinary (www.vipbinary.com). In 2016, the U.S. Commodities Futures Trading Commission (CFTC) filed a lawsuit against these GlobalTrader365 and VaultOptions for illegal activities (link to the lawsuit). This and other important information has been provided by Fraser Perring who has been covering Wirecard for a while now.

CTFC lawsuit against GlobalTrader365 and VaultOptions

CFTC investigations have shown that GlobalTrader365 and the VaultOption used the same bank accounts and payment service providers. Moreover, it was found that both companies have the same owners – the people and companies of Israeli SpotOption. It was S.O. SpotOption Limited registered in Cyprus.

SpotOption and Wirecard have also been involved with the illegal binary options scheme of Banc De Binary. In June 6, 2013, Banc De Binary was charged by both the Commodity Futures Trading Commission and the Securities and Exchange Commission for alleged violations of U.S. financial regulations. The SEC obtained a preliminary injunction from U.S. District Court for the District of Nevada to prevent and freeze any further trading with U.S. customers. Read the whole story on Banc De Binary here on FinanceFeeds.

The CEO and three managers of Israeli Yukom Communication, which also operated with SpotOption, were accused of fraud and money laundering by U.S. prosecutors. Respective indictments have been filed with the trials expected for 2019. The U.S. prosecutors accuse the Israeli CEO Lee Elbaz and the three former Yukom employees Lissa Mel, Liora Welles and Shira Uzan of cheating U.S. investors Lee Elbaz here). U.S. authorities believe that the YUKOM sites have betrayed investors to the tune of tens of millions of dollars.

The list of enforcement actions and court cases around illegal binary options broker could be continued. The point is clear! Binary options has been a fraudulent industry. Let’s have a closer look at the numbers and players.

Binary Options – The Billion Dollar Gamification

Back in 2016, SpotOption claimed that two-thirds of the binary option dealers worldwide used its trading platform and generating some USD 5 billion annual trading volume. In 2016, 300 binary options brands operated on the SpotOptions platform. The SpotOption founder, the Israeli Pinchas Peterkazishvilli (aka Pini Peter) was convicted on money laundering charges in 2005 The Bureau of Investigative Journalism reported.

Besides SpotOption, Tradologic was the second largest software platform operating 240 binary options platforms. Tradologic was also run by Israeli citizens. Director and shareholder of Tradologic was the Israeli Gal Barak, who has been arrested recently in Bulgaria as a result of an enforcement action of Austrian, German, and Bulgarian authorities. In addition, Gery Shalon, an Israeli accused in the USA of money laundering, securities fraud, and illegal online gambling, is an investor and shareholder in Tradologic. And finally the Russian citizen Vladislav Smirnov. The latter is one of the most prominent spammers and hackers on this planet and is also known to the US courts in this regard.

Beneficial owners of Tradologic

Based on the Tradologic platform, the German Uwe Lenhoff operated his illegal broker sites like Option888. Lenhoff was also invested in Tradologic via its holding company Lensing Management Services. Like Gal Barak, Lenhoff has been arrested in the international enforcement action in February 2019.

Binary Options Payment Services

German Wirecard has been involved in this global network of illegal brokers as a payment transaction service provider. Moreover, the Wirecard group was a partner of SpotOptions own payment aggregator ChargeXP Investment Limited who served many of its 300 white label operators. Wirecard and ChargeXP also covered the Asian binary options markets with their payment services. Below the bank wire instructions of the Japanese binary options broker 60Trader (www.60trader.com) or SmartOptions. Just to name two of them.

Wirecard and ChargeXP served the asian binary options market
60Trader payment instructions

We also know that Lenhoff and Barak were shareholders in the Montenegrin company Global Payment Solutions. It was founded in August 2015 together with partners from Serbia and Montenegro. The German axis with Lenhoff and Wirecard was demonstrably very closely interwoven with the Israeli axis around Barak and Tradologic.

Finally, we would like to point out at this point that Lenhoff comes from the field of online gambling. This market segment, banned in the USA, was the ground on which the binary options grew. In this respect, the involvement of Wirecard in the binary options is no longer surprising, but should rather be regarded as an evolutionary development.

  1. I don't like fake news says:

    Your website is very entertaining given that most of the stuff you publish is not correct since you are an armchair detective like you’d find on reddit. Vault Options anf Global Trader365 were owned by the Adest brothers in Jerusalem and a south african Israeli. You should consider changing your site to Entertainment rather than News, since your reporting is usually wrong.

    1. Redakteur says:

      Well, our article doesn’t say who the “binary options company” owns. Typically, that’s not even important because they are most often offshore shell companies and change frequently. The important issue is who were the beneficial owners and in control. We suggest reading the CFTC lawsuit for more details. What is fact, however, is that GlobalTrader365 und VaultOptions have been operated on the SpotOption platform by Israeli people. As a matter of fact both sites (and many others) have been working with Wirecard and ChargeXP (which is beneficially owned by SpotOptions guys which has been confirmed to us by them).

      Anyway, we love to hear that you are entertained. Moreover, we appreciate you hint with the Adest brothers and will expand our research.

      Until then, we suggest to take a look into the web archive. As of April 2012, GlobalTrader365 was operated by ChargeXP, a SpotOption company: Wayback Machine. In 2014, they changed the domain (usual proceedure with these scam broker) into http://www.globaltrader365.net which was operated by the Bulgarian EEMG EOOD by Israelis. Surprise, isn’t it? No, it’s almost entertaining, right? Except that tens of thousands of people lost millions with these scammers.

      1. fintamir says:

        I just would like to add a piece of information on thei Bulgarian EEMG EOOD which operated the GlobalTrader365.net platform after the domain switch. It’s maybe interesting to learn that in 2013 the operator of GlobalTrader365.com switched from ChargeXP Investments Ltd to Brainerd Properties Limited, Suite 41/42, Victoria House, 26 Main Street, Gibraltar. And it wasn’t to only switch. As my colleague rightfully pointed out these official operators are changing frequently to confuse investors and authorities.

        This Bulgarian company was founded by the Israeli Simon Cohen who is not related to me in any way. More details can be found in the Bulgarian commercial register. I just did a quick snapshot:

      2. fintamir says:

        Regarding http://www.vaultoption.com it’s even easier to show that it was owned and operated by SpotOption. Simply have a look at this historic VaultOption website dated Oct 30, 2012. It states that the website is operated by S.O. SpotOption Ltd, Cyprus. The very same company that owned ChargeXP Investments Ltd. Hence, the FinTelegram report is completely correct. It may well be that other people have been involved in the scheme but for armchair detectives we made our job quite well, I guess. It’s not easy to get hold of these perpetrators:

  2. This Blog Is Very Entertaining says:

    It’s entertaining reading this…you people really don’t know what your doing and once again are usually wrong. The marketing company that owned Vault Option and global trader 365 you can find by purchasing the company documents from the israeli registrar. the israeli company name of the globaltrader365 is globaltrader365 ltd as they didn’t hide back then.

    It’s evident you will never be able to report accurately because you 1) don’t know how the industry operates from the inside 2) you are basically arm chair detectives reporting inaccurate data. It’s entertaining but you should focus your efforts on something that you can report with accuracy. this niche is not for you.

    Daniel Patley Dov Adest are the people that owned vault and globaltrader365. there names are on the israeli company documents of the actual marketing firm. Adest’s brother owns tradeo.

    1. fintamir says:

      My friend, from your IP address and wording I understand that you are the very same guy who already posted before. Again thank you for your comment. FinTelegram appreciates any discussion. The funny thing here is that you try to convince us that the founders of those shell companies really matter. Actually, they don’t and you are aware of that, I am sure. That’s why you guys call them monkeys right? Changing almost faster than speep od light and thus you are right. The “monkey status” will alwyas be inaccurate.

      You guys cheated hundreds of thousands of investors with shell companies and monkeys and hid yourself in the background. Hence, let me kindly teach you a lesson we learned: monkeys don’t count. It’s the beneficial owners behind SpotOption, Tradologic and their services companies. And the Payment Services Providers (PSP). Maybe we are just some armchair investigators but we learnt our lesson too, I hope. And we have some people supporting us from the crime scene. So yes, maybe these Daniel Patley or Dov Adest founded OptionVault or GlobalTrader365. But they are the monkeys and hence of limited interest to us.

      And a final thing: in this article we focused not on monkeys or beneficial ownerw. We focused on the PSPs that facilitated the global fraud with binary options.

  3. This is good entertainment says:

    Yeah you are still wrong with how the psps work. PayPal processed large amounts of payments for these companies as did many major global banks. You have yet to name the Israeli companies that had the iso partnerships with companies like wirecard and for a website that claims to have a German language emphasis it’s hilarious you’ve missed the biggest merchant bank that serviced the industry which is in Austria (Last letter of the banks name is A)

    Keep up the reddit armchair sleuthing and don’t quit your day job

    1. charlenelens says:

      pls tell us… which was the biggest merchant bank in Austria that serviced the industry? and tell us the Israeli companies that had the iso partnerships with companies like wirecard.

      1. Ludwig says:

        Probably Meinl Bank, no better then past Bulgarian TBI Bank
        Btw, still wonder who was behind the cc processing of those fake pharma scam’s, remember Vienna criminal Viagra case, Tal family members been jailed also various cases in Germany….

  4. Pigs can fly it’s on a blog I read says:

    Global trader 365 Ltd. in Israel was not a shell company it was the marketing office in Israel and the owners received 85+% of all the revenue generated from the platform. Once again keep up the great reporting very informative and accurate

  5. Jack says:

    This article CONTAINS FAKE NEWS copied from other sites. globaltrader365.com WAS NOT INVOLVED in any of the above it was in fact Globaltrader365.NET that was in fact connected to vaultOptions. I suggest you clarify and clean your article before the law gets hold of you

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