Blockchain Intelligence Reveals Network of Vietnamese Operators
Beware the Binary Options Scam
TRM is tracking a network of Vietnamese binary options platforms which appear to be operating as a scam. The 30+ platforms – which only accept crypto deposits – are marketed as investment platforms and promise big profits. Yet on-chain analysis shows an absence of any trading activity, suggesting that they are instead scamming participants.
TRM’s analysis also indicates that the operators of these platforms are finding ways to skirt measures taken by Vietnamese authorities to curtail their activity. While authorities blocked the websites of some of the platforms in question, other domains – posing as separate entities, but seemingly controlled by the same wallet-holder – remain active.
Binary options are widely linked to scams and fraud around the world, and their operators have faced a number of recent law enforcement actions. TRM Blockchain Intelligence tools uniquely allow compliance teams, law enforcement agencies and regulatory bodies to trace the funds flowing to platforms leveraging crypto assets and monitor their trading activity, in order to shine a light on illicit operations and take action.
Binary Options: A High-Risk Product with Investor Appeal
Binary options are financial instruments where investors bet on the price of a financial asset going above or below a specified amount within a set timeframe. If they bet correctly, they can receive significant profits via an “all-or-nothing” payout.
Given the high stakes involved, these products are widely considered high-risk for retail investors. Yet binary options can seem more attractive to investors than other financial instruments. For one thing, they appear to grant participants a greater degree of control – unlike other black box investment products, investors themselves participate in trading decisions. Additionally, with a single “yes/no” proposition, they seem more approachable and appear to promise a greater chance of success (even if retail investors overwhelmingly tend to incur losses while trading binary options).
The ability to make deposits in cryptocurrency is enhancing this appeal. With easy cross-border money transfers and little-to-no KYC or AML controls, crypto has made online binary options platforms more accessible than ever before. As a result, more investors are in danger of being drawn into high-risk, unregulated and potentially fraudulent schemes.
Binary options have long been associated with frauds and scams across the world, with criminals seeking to exploit investor intrigue. For this reason, they are banned in many jurisdictions, including the UK and Australia. Binary options are legal but heavily regulated in the U.S., with trading permitted only on authorized exchanges. However, a significant – and growing – portion of the binary options market operates through non-compliant online trading platforms, according to an investor alert issued by the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). The alert observes a rise in fraud complaints linked to binary options trading platforms in recent years.
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