If you know anything about the plague of online investment scams (binary options, CFD, Forex, and others), you know that one thing they all have in common, if they’re any good at what they do, is very slick sophisticated convincing online trading platforms. What you may not know is that despite the hundreds or thousands of scam websites plying their sinister trade, most of them share just a few common platforms. The developers create and market them to the scammers who build binary option fraud brands and charge serious money for the service.
A perfect case study that describes this idea is the amazing rise and fall of SpotOption. In the binary options heyday of the early to mid-2010s, this company was the brains behind literally hundreds of the most popular and profitable binary options brokers. The platform they offered was comprehensive. It managed the trades, the content, the customer relations, the payments, and more. In effect, all those brokers were nothing more than window dressing. All those company names, websites, geographical locations, and marketing strategies were all doing the same thing and offering the same services. They had to, since they were all running precisely the same software.
This business model, in which the exact same product is given a unique external appearance to be marketed by different companies is called “white label”. A common example in our daily lives is the “store brand” line of products sold by many of the larger supermarket chains. The generic “cola” or “spaghetti” sold by various supermarkets under their own names may all be produced in the same factory and the label is the only difference between them.
In exchange for its services, SpotOption charged as much as 12.5% commission on all the revenues of every one of the hundreds of brokers that used them. That’s a whole lot of money. And it’s not like they didn’t know what the brokers were up to. Leaked conversations and presentations by some of SpotOption’s senior staff actually boasted about the high percentage of investors who lost their entire investments and never got a penny back. Any why not? After all, every penny lost by an investor is a penny gained by the broker and shared with SpotOption.
The good times rolled for a few years as millions of investors lost billions of dollars. But between 2016 and 2017, it finally came crashing down as the press, the public, and the government finally became aware of the rampant corruption in the industry. Brokerages were raided as various laws were passed outlawing or severely restricting the industry around the world. Finally, it was SpotOption’s turn. The FBI raided their offices in 2018.
A year earlier, seeing the writing on the wall, SpotOption began efforts to diversify their business to provide platforms and support for Forex, CFD, and cryptocurrency trading. In the end, it all came to nothing. As of early 2019, the SpotOption website is no longer active.
Today, it’s almost impossible for a binary options scam broker to operate in any country that has rigorous legal and regulatory capabilities. Though they still manage to steal from customers around the world from their hiding places in Eastern Europe and tiny tropical island nations.
If you have been the victim of an online investment scam, contact MyChargeBack today for a free consultation. We are a fund recovery service headquartered in New York. We have helped our clients on every continent recover almost $10 million of their money.