Citrades CEO Pleads Guilty to Running $8 Million Binary Option Scam

Jason Scharf, an Israeli-American operator of the now-defunct binary-options brand Citrades, pleaded guilty to his role as CEO of the company that swindled more than $8 million from at least 8,000 victims, most of them located in the United States.

Jason Benjamin Scharf, 37, of Los Angeles, California, has been hit with fraud charges for violating trading regulations and defrauding his customers. He pleaded guilty to one count of conspiracy to commit wire fraud, the US Justice Department said Thursday.

CITrades is no longer doing business via the internet, at least not while using the names under which it has been sanctioned and banned. The company is believed to have operated a Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term resulting in the loss of all funds for all the investors.

The initial legal action in 2017 describes CITrades charges as allowing US customers to trade binary options products prohibited under the CFTC’s rules. The order also finds that Scharf defrauded customers by making false representations in his solicitations. Scharf did his business through Citrades.com and AutoTrading Binary.com, while he developed and sold autotrading binary options systems that don’t actually work.

The Wolves of Binary Options

The agency says that rather than allowing his clients to trade binary options, Scharf misappropriated almost $8.3 million of client funds. The defendants falsely told their customers, among other claims, that they offer a safe investment with steady and guaranteed returns.

The detailed complaint alleges that the fraud scheme has been going on since at least February 2013 and involved fraudulent ad campaigns that used false promises to induce clients to send their money to participate in binary options trading, but in fact, they were duped into a Ponzi scheme.

The justice department’s statement contained a detailed description of how the scam operated. It says: “Scharf further admitted that while Citrades marketed itself as a Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term through which binary options could be traded, investors were not actually trading with other investors. Instead, they were investing in transactions whose parameters, including the “strike price” associated with the binary option, were set by a separate company that served as a platform provider.”

It further added that although the man was prohibited from destroying his records, to which the authorities now have access, he deleted “potentially incriminating emails from an account that he used to conduct Citrades-related business.”