$22m Binary Fine, Bitfinex Under Investigation: Editor’s Pick

We take a look at the past week's most intriguing, beleaguering and captivating stories

It’s been another busy week in the foreign exchange (forex) and cryptocurrency space, with a lot of developments taking place. You can stay up to date with our best-of-the-week analysis.

A Florida Man…

Having been banned in Europe, the binary options industry is undergoing a slow-motion death across the globe. Everyone capable of jumping off the binary bandwagon already has and those that didn’t are being blown into oblivion.

The iFX EXPO is Back in Limassol!

More evidence of this came this week as a Florida man was fined $22 million by the US Commodity Futures Trading Commission (CFTC) for marketing the derivatives products to Americans. Michael Shah worked as a marketer for a number of major binary brokers, including Trade Rush, Banc de Binary and OptionRally.

The CFTC originally proposed a $75 million fine but ultimately decided to reduce that figure. Nonetheless, it is the largest fine ever handed out to someone involved in binary options trading in the US.

Heading to Frankfurt

Many retail brokers are feeling down today. What with all the regulatory and payment problems, it’s easy to see why.

But one broker isn’t letting the problems facing the industry hold it back. This week, Trade.com announced it would be opening a new office in the German city of Frankfurt.

The group said that its new office would aim to create a tailored trading experience for local clients. Prost!

Partners in crypto

eToro can’t seem to stay out of the headlines at the moment. Having launched its services in the US, opened a new crypto exchange and confirmed it plans to launch commission-free stock trading, the firm has been one of the most active in the retail trading world in 2019.

And this week the social trading company showed no sign of slowing down. The firm announced a new partnership with Napoleon Group – France’s only regulated cryptocurrency asset manager.

The deal between the two companies will see Napoleon Group launching a copy-trading portfolio on eToro, allowing traders to imitate the asset manager’s cryptocurrency trading strategy.

Who cares about Satoshi Nakamoto?

Like Bigfoot and the Loch Ness Monster, Satoshi Nakamoto is an elusive figure. The founder of bitcoin and blockchain has never revealed his identity.

And, despite what any crazy Australian says, it seems that there’s a good chance we’ll never really know who he is.

Suggested articles

altFINS Launches New Cloud-Based Cryptocurrency Analysis PlatformGo to article >>

Does that really matter? Given the gift he, or perhaps she, has given to the world, it’s arguably not too important for us to know who he is anyway. Still, we’d like to know.

VCs crush crypto

Unlike many other financial institutions, venture capital firms have been happy to foray into the world of cryptocurrency. Indeed, there are now VC firms dedicated to investing in cryptocurrency and blockchain projects.

But according to NEM Ventures executive Dave Hodgson, VC firms have the potential to support, and crush, cryptocurrency firms.

Aside from cutting out initial-coin-offerings, investors can also deliberately take run down a company’s bank balance by dragging out due diligence proceedings. Of course, NEM Ventures would never do such a thing.


The bad vibes surrounding cryptocurrency exchange Bitfinex just won’t go away.

This week, the US Department of Justice confirmed that it was investigating the exchange’s payments processors.

Two individuals, one Israeli and one American, named Ravid Yosef and Reginald Fowler, were charged by the DoJ for having misled financial institutions.

The pair allegedly said that the money they were handling was for real estate deals when, in reality, it was being used to make payments for cryptocurrency companies.


Staying with Bitfinex, the exchange was also under investigation this week for some shady dealings regarding Tether.

A stablecoin tied to the USD, Tether is operated and issued by Bitfinex.

But now US authorities in New York are looking at a dodgy loan related to the backing of the cryptocurrency that, the exchange said originally, was tied at 1:1 with the dollar.

Now it appears the firm is using a fractional reserve system and, were everyone to convert their stable coins at once, Bitfinex would not be able to compensate them with USD.

The exchange compared its operations to the Federal Reserve. But, as Finance Magnates very own Victor Golovtchenko so astutely put it, “the worrying aspect of this statement is the fact that it compares the stable coin’s position to that of the US central bank.”

Got a news tip? Let Us Know