United States – Crypto Experts shares how binary options trading gets involved with the bankrupted FTX’s CEO, Sam Bankman-Fried or SBF.
More than $3 billion worth of BTC or Bitcoin was removed from crypto exchanges in the previous month. The crisis of FTX woke the crypto traders, resulting in a drastic effect on the industry.
The FTX Exchange declared that it expanded its operations across the European market in March 2022. The company even acquired a license to manage the company in Europe by creating a partnership with K-DNA Financial Services, LTD, which was a Cyprus-licensed funding company.
At first glance, the partnership might be an ordinary transaction. It might make sense to collaborate with a licensed firm instead of establishing a new venture where you’ll have to go through the whole regulatory process again. On the other note, it turned out that K-DNA Financial Services was not an ordinary funding firm.
K-DNA Financial Services was one of the companies that got involved in fraud schemes before FTX became their partner, especially in the binary options industry.
According to the CEO of Binance, Changpeng Zhao, SBF is one of the biggest fraudsters in crypto history, and he’s also a master schemer of the media. Binance tweeted this statement, having a long Twitter thread as it explained the wrong narratives that he witnessed.
Binary options are an investment kind of product that lets traders bet on yes-or-no results. For example, a crypto trader could purchase a binary option indicating that the price of a particular stock will increase up to 5% or more in a day. The option has pre-defined payout odds that don’t involve the crypto trader in taking an immediate position in the fundamental assets, unlike typical optional contracts. Binary options do not correlate with the fundamental event or asset.
There’s a more complex version, which is the CFD or Contracts for Differences. CFDs don’t result in deliveries of fundamental security, and these are always cash-settled. The loss or payout on a CFD monitors the price change of whatever the fundamental asset might be.
Binary options trading is illegal in the United States, but it’s legal in Europe. Hence, the method has ties to one of the largest corporate outrages in Europe. Wirecard, a payment processing firm in the German stock market, failed after the fraud of the company got exposed. This firm also operated as a money laundering service for many criminal enterprises, which also included the binary options industry.
SBF proved that users on FTX just traded speculative assets when Cryptomanran asked him, which means there are no real assets, and funds were secured elsewhere.