Binary Options should in principle be financial derivatives based on options. They belong to the category of forward transactions.
In many cases, however, Binary Options are offered which literally guarantee a total loss. Sophisticated software initially tricks investors into believing that they are making a profit, so that more and more money is invested. When then suddenly, usually overnight, a total loss occurs, which have resulted from allegedlysudden negative price developments. It is concealed, however, that the money invested by the customers was never invested at all, but was deducted from the fraudsters' own pockets via camouflage- and fictitious companies when they made their first deposit. It concerns most criminal machinations of Internet and Cyber cheats.
The trading announcements on the platforms are all together only fictitious and deceive profits, so that the investors invest still further funds.
And should nevertheless once an alleged profit be paid out, it concerns truthfully the partial repayment of the investments with the purpose of luring the damaged ones still more money out.
Recently the trading platforms recruit in the case of a total loss with so-called “failure insurances”. This is apparently a clumsy attempt to divert money from investors again. The argument is that a one-off amount would accrue for the insurance premium. It is a fact that such insurances do not exist in principle and therefore a payment is of no use.
In part, attempts are being made to put investors in distress with alleged tax payments still outstanding. It has been shown that the traders only want to obtain payments from the injured parties again without any actual reason.
In some cases, even the online banking entrance data were queried, so that private accounts were simply cleared.
In the meantime, it has become apparent that the banks involved in the payments received (the “Recipient Banks”) have apparently failed to comply with their obligations and thus played a full part in investor fraud.
A bank is subject to due diligence and compliance obligations. Banks are obliged to establish and verify the identity and content of a contracting party’s business profile. This is usually done by checking the legal form, the registered office address, the date of incorporation and the entry in the commercial register. In addition, a bank is obliged to check and validate incoming payments. Finally, banks must carry out risk-adequate monitoring of their business relationships, including the transactions carried out in the course of the business relationship, in order to ensure that these match the business profile.
It has been shown that the Recipient Banks carried out transactions without complying with the above obligations, especially as the trader's accounts were usually emptied when the investments exceeded certain amounts.
The question arises, and rightly so, what the Recipient Banks have done to carry out such transactions. The answer to this question can probably be limited to an explanation. The banks have earned very well. As far as can be seen, the banks must have charged at least an unimaginable 3% of the transaction volume as a transaction fee to the traders. It is probably only for this reason that it can be explained that the Recipient Banks did not really want to “ascertain” that their customers were fraudsters.
Inevitably the Recipient Banks have to put up with the accusation that they contributed to the fraudulent behaviour of the traders. Also, the suspicion of the money laundry stands in the area.
In our opinion, there is a good chance that the Recipient Banks will also be held liable for the damage suffered by the injured parties.