CFTC Orders Binary Options Fraudster Return $7 Million in Ill-Gotten Gains

On September 9, the U.S. Commodity Futures Trading Commission (CFTC) ordered Yakov Cohen to disgorge the $7 million in ill-gotten gains he made from a fraudulent binary options scam.

According to the regulator, between 2014 and 2017, Cohen and co-defendants lured investors into binary options investments in the United States and elsewhere.

They created binary options trading websites under fictitious brand names such as BigOption, BinaryBook, and BinaryOnline, and falsely claimed to profit when their clients profited. However, they actually profited from their clients' losses, while 95% their clients lost money.

These trades were only book entries controlled by defendants, who claimed that they were offering real binary options trades that were subject to objective market conditions.

Client funds were not kept separate, but were commingled with defendants' own funds. Cohen also used offshore bank accounts to transfer funds.

Cohen has been sentenced to 66 months in prison for wire fraud in 2019.