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The latest in forex fraud news: 18th September


CFTC charges binary options scheme leader

A US regulator has announced that it will take a man who ran a binary options scheme involving forex exchange to court over what it alleges is fraudulent behaviour.

Jared J. Davis, who is from the US state of Ohio, is accused by the Commodity Futures Trading Commission of running the scene between 2012 and 2016 – and possibly for longer.

It is understood that the scheme was binary options in nature.

This sort of system, which is notorious in the trading world, forces traders to choose between a simple yes and no, or rise and fall, set of choices.

He used a range of trading names including Option King, Option Mint and more.

His recruitment system was allegedly elaborate and involved everything from phone calls to websites.

He is believed to have taken $10m, or possible more, for the site, which traded both forex and commodities.

However, underneath the surface, the system he was operating was allegedly not fair or proper.

He is accused of having changed the rubric of the trading software so that the chances of a loss were higher, while he was also believed to have deliberately opened the opposing position each time a trader opened a position of their own.

As a consequence, the chances of each customer losing cash when placing a trade was very high.

In separate developments, other organisations are also pursuing claims – including criminal ones – against Davis.

A press release from the Commodity Futures Trading Commission outlines the separate accusations.

“In a related pending criminal action, the U.S. Attorney’s Office for the Northern District of Ohio charged Davis in a 22-count indictment for conspiracy to commit wire fraud, conspiracy to launder money, wire fraud, money laundering, obstruction of justice, tax evasion, and other crimes”, it said.

“In addition to the criminal action, the U.S. Securities and Exchange Commission (SEC) charged Davis in a related enforcement action and entered into a partial settlement against him”, it adds.

Three Filipino crypto firms suspended in a row over licenses

A handful of cryptocurrency firms from the Southeast Asian nation of the Philippines have been suspended.

The Cagayan Economic Zone Authority (CEZA), which is a provincial regulator in the country, said that three firms – all of which are crypto exchanges – would need to cease trading while they had their licensee status more thoroughly looked into.

According to press reports, the three firms were in the process of moving from one regulatory oversight provider in Metro Manila, the country’s capital, to the new one in Cagayan.

The firms were named as Asia Premier, Golden Millennial Quickpay and Liannet Technology Ltd.

It is understood, however, that the decision is not permanent – despite the fact that Golden Millennial Quickpay had its headquarters raided last week.

“Their operation is temporary. We are pushed by our circumstances because of the lack of our facilities in Cagayan. After the incident, there can be zero tolerance until movement to Cagayan”, said Mike David, a spokesperson for CEZA.