The investigation revolves around the activity of two binary options firms in the US.
Representatives of the US Federal Bureau of Investigation (FBI), accompanied by Israeli police officers, showed up at the SpotOption headquarters yesterday (Monday). This surprise visit to the binary options platform provider’s office in Ramat Gan, Israel, was another chapter in the ongoing Lee Elbaz investigation.
SpotOption representatives cooperated fully with the authorities, in accordance with the law, answered their questions and shared documents and other company materials related to the case.
This drastic move was apparently a part of the FBI’s ongoing investigations into binary options companies that are allegedly illegally accepting client deposits from the US.
The investigation was made public in late September last year, when Lee Elbaz, CEO of Yukom, a binary options technology provider, was arrested in New York on charges of wire fraud and conspiracy to facilitate wire fraud. Yukom’s clients, Eagle Option and BinaryBook, allegedly targeted clients in the US without having the appropriate license.
The FBI based its suspicions on the content of a confidential email correspondence between SpotOption and BinaryBook, which it obtained from Google. Furthermore, according to data collected by the FBI, between the second quarter of 2014 and the fourth quarter of 2016 BinaryBook received $98.9 million in deposits, though it’s not clear how much of this sum was deposited by US citizens.
In late November, Finance Magnates reported that SpotOption is set to close all of its binary options-related activities in Israel, as part of a dramatic series of changes undertaken in an attempt to keep pace with the evolving regulatory framework.
This move was another attempt by the financial services provider to align with the tough regulations imposed by the Israeli Securities Authority (ISA), led by the hawkish Prof. Shmuel Hauser. Israel is considered to be one of the toughest countries in the world with regard to regulating binary options trading, having banned the industry altogether.
Last March, the trading technology leader significantly cut its Israeli staff after the Israeli Knesset announced a heavy crackdown on binary options and forex operators targeting foreign jurisdictions. The company headquarters in Israel continued operations, with the majority of staff dedicated to R&D.
Last May, SpotOption launched Spot5, its latest platform, focusing on automated management and CFDs. In November it launched OTC Book, the group’s new subsidiary for CFDs, FX, and cryptocurrency liquidity. Beyond its presence in the CFD arena, SoftOption introduced blockchain-based trading offers in August, adding 30 cryptocurrencies to its trading portfolio.