Shady Past of DX.Exchange Brought to the Surface
Earlier this month, Estonia-based Dx. Exchange announced that it allows users to purchase tokenized versions of real- world stocks listed on NASDAQ. This move from the Estonian exchange was to leverage the security and transparency aspects of the blockchain technology.
However, some shady details regarding the exchange operations and its past have recently come to surface. Dx. Exchange is now linked with a suspicious binary options trading platform called SpotOption. In the past, a number of binary options trading platform have emerged out as potential scams. Furthermore, many countries like Canada have put an outright ban on such platforms.
Also, the Dx. Exchange owner Limor Patarkazishvili had more than 90% stake in SpotOption previously. Furthermore, it turned out that SpotOption was one of the 100 firms in Isreal scamming its customers. Note that the binary options trading is not an inherent scam. However, the Isreal turned out to be a breeding ground for frauds around binary options. The country ultimately decided to bring a blanket ban on it.
The Sketchy Past of SpotOption
Founded in 2010, SpotOption witnessed an exponential growth in the first five years. By 2015, SpotOption was offering back-end services to more than 300 global affiliates, most of whom were based in Israel. The company also offered white-label products that were regarded as binary options.
However, behind its gloomy outlook, the company was accused of being involved in shady practices. Last year, the local news publication Times of Israel reported:
“Fraudulent Israeli binary options companies ostensibly offer customers worldwide a potentially profitable short-term investment. But in reality — through rigged trading platforms, refusal to pay out, and other ruses — these companies fleece the vast majority of customers of most or all of their money. The fraudulent salespeople routinely conceal where they are located, misrepresent what they are selling, and use false identities.”
In 2018, the FBI raided SpotOption offices in Israel in a lookout for its Yukom CEO Lee Elbaz. The FBI also received big support from local law enforcement authorities in filing a big case against Elbaz. She was accused of defrauding the U.S. investors through a fraudulent binary options trading scheme.
Yukom was one of the popular brokers using the SpotOption software. Yukom had white-labeled the binary options trading software and offered it to the clients. In October 2017, a massive controversy chipped-in when the Israeli government had given SpotOptions grants worth over $270,000 to expand its operations in China.
SpotOption Founder Convicted of $68 Million Fraud
In a detailed case presented by CCN, the SpotOption founder and Israeli businessman Pinchas Peterktzishvilly was convicted of committing a fraud worth $68 million. Popularly known by the name of Pini Peter, Pinchas was accused of forging digital signatures to embezzle money at TradeBank. On the other hand, SpotOption co-founder Oren Shabat was also involved in other fraudulent activities.
The publication notes: “SpotOption’s co-founder is a self-professed Israeli crypto advocate named Oren Shabat Laurent. He has been in trouble for hiring experts to help mask the way both SpotOption and his own company, Banc De Binary, used affiliates and brokers to facilitate the billions of dollars gleaned in their fraud scheme.”
CCN has presented a detailed case into the entire matter.
Back to the list