BigOption, BinaryBook, and BinaryOnline Fine - $451 Million - CFTC - Jan 2025

Quick facts

• Amount: $451 million
• Date: 29-Jan-25
• Violations: Fraudulent solicitation and operation of an illegal retail binary options trading scheme, offering illegal off-exchange commodity options, operating as unregistered Futures Commission Merchants (FCMs), and violations of the Commodity Exchange Act (CEA) and CFTC regulations.
• Violation Period: 26-March-2014, through 12-August-2019

BigOption, BinaryBook, and BinaryOnline Fine Overview

The U.S. District Court for the Northern District of Illinois entered a default judgment against an international group of offshore entities and individuals involved in a global binary options fraud scheme. The Commodity Futures Trading Commission (CFTC) announced that the default judgment found these five foreign-incorporated companies and three Israeli citizens liable for fraudulent activities that harmed retail customers (including U.S. residents).

Operating under fictitious trade names such as BigOption, BinaryBook, and BinaryOnline, the defendants misled customers about the profitability of binary options and utilized deceptive practices—including misrepresentations of broker identities and credentials, manipulation of trading platforms, and obstruction of customer withdrawal requests.

The entities involved are Yukom Communications Ltd. (Israel), Linkopia Mauritius Ltd. (Mauritius), Wirestech Limited d/b/a BigOption (Marshall Islands), WSB Investments Ltd. d/b/a BinaryBook (Anguilla, UK, St. Vincent and the Grenadines, Gibraltar), and Zolarex Ltd. d/b/a BinaryOnline (Marshall Islands). The individuals found liable are Yossi Herzog, Lee Elbaz, and Shalom Peretz.

Details of the BigOption, BinaryBook, and BinaryOnline Fine

Fraudulent Solicitations

• Defendants used phone calls, emails, and websites to claim high profitability for binary options trades.

• Brokers told potential customers they would earn quick returns on short-term trades. In reality, the majority of clients lost money.

Misrepresentation of Broker Identities

• Individual brokers used false names and fabricated backgrounds, claiming trading expertise or U.S. locations while operating from overseas.

• A broker who introduced himself as a seasoned Wall Street professional was neither located in the U.S. nor held the claimed credentials.

Misappropriation of Funds & Bonus Misrepresentations

• The defendants misused customer deposits for their own gain and made “bonuses” or “risk-free trades” sound beneficial. In truth, these offers complicated or blocked customers’ withdrawal requests.

• These promotions often came with undisclosed or misleading terms. For instance, bonuses might have required customers to meet exceptionally high trading volumes before any funds (including their initial deposit) could be withdrawn, effectively locking in the money. "Risk-free" trades might have resulted in losses being credited back as a "bonus" with similar restrictive conditions, rather than a return of actual capital.
  

Platform Manipulation

• The trading platform’s “risk settings” were adjusted to limit or prevent customers from winning trades.

• When a customer’s trade was “in the money,” the platform might abruptly shift the payout logic, lowering returns or negating the trade’s success.

• This could include altering the parameters of a trade, such as the expiry time or strike price, at the last moment to the customer's disadvantage, or by adjusting payout ratios to be unfairly low, thereby ensuring the platform, and by extension the defendants, profited from customer losses.

BigOption, BinaryBook, and BinaryOnline Fines and Penalties

Total Monetary Sanctions: $451.6 million

• $112.9 million in restitution
• $338.7 million in civil monetary penalties

Parallel Criminal Actions

• Yakov Cohen Settlement: Another defendant in the CFTC’s complaint, Yakov Cohen, previously entered into a consent order, agreeing to disgorge $7 million in ill-gotten gains.  
• Lee Elbaz Criminal Conviction: On August 7, 2019, Lee Elbaz was convicted by a federal jury of wire fraud and conspiracy to commit wire fraud based on substantially the same facts. She was sentenced to 20 years in prison and ordered to pay $28 million in restitution.   
• Yossi Herzog Criminal Charges: Yossi Herzog has been charged criminally in connection with the scheme but, as of January 22, 2025, had not appeared to answer these charges.
• Yakov Cohen Criminal Conviction: Yakov Cohen pled guilty to conspiracy to commit wire fraud. He was sentenced to 5.5 years in prison on August 15, 2024, and ordered to pay $7 million in restitution on January 22, 2025.   

Select Quotes

• "Defaulted Defendants misrepresented that binary option transactions were profitable, when in fact the substantial majority of their customers lost money, and the individual brokers misrepresented their names, financial expertise, and physical location." (Court Document, Page 5, para 19)   

• "Defaulted Defendants also used manipulative and deceptive devices to perpetuate their binary options scheme, including manipulating the Platform’s risk settings to limit or prevent customers from being “in the money” with winning trades." (Court Document, Page 6, para 21)

• "Defaulted Defendants misappropriated customer funds and made additional misrepresentations to customers in order to thwart customers’ attempts to withdraw their funds, including failing to disclose material information about so-called “bonuses” and “risk-free trades.”" (Court Document, Page 6, para 20)

Sources

• CFTC - Court Order

• CFTC - Release Number 9040-25-Federal Court Orders International Enterprise to Pay Over $451 Million for Global Binary Options Fraud