No, cryptocurrency is not binary options and a cryptocurrency exchange is not the same as a binary options brokerage. But cryptocurrency has been heavily infected by scams, and one of the most widespread of them is fraudulent cryptocurrency exchanges. We know. MyChargeBack is an international fund recovery firm specializing in serving victims of scams, and many of our clients lost money by investing in them.
First, let’s explain some basic differences.
Theoretically, cryptocurrency is a real asset. You can buy and sell it. But it’s a virtual. When you purchase crypto you do not get a real coin in exchange. Crypto is an alternative to fiat currency (hence the equivalent term “altcoins”). Your proof of ownership is its registration in what is called a blockchain, a type of digital ledger that is designed to be virtually impossible to hack.
Cryptocurrency is stored in a “wallet” that has both a public and a private “key,” meaning a code. The public key is used to transfer crypto into the wallet and the private key (which the owner retains) is used to transfer crypto out of the wallet.
Bitcoin, developed in 2009, was the first cryptocurrency introduced to the market. Since then, over 4,000 other altcoins have appeared, but most of them fizzled almost immediately. A good number of them were also scams. While as many as 1,600 different altcoins can be purchased, the major ones number only a few dozen.
If you don’t own it already, to acquire a cryptocurrency you have to go to a cryptocurrency exchange. Some exchanges are solely online while others actually have brick-and-mortar offices you can visit in person. Like on Wall Street, a cryptocurrency exchange enables the holder of an asset to sell it to someone else. The global supply and demand determines the price.
Binary options, in contrast, are not assets that you own. They are bets. You are betting whether or not the value of a stock, a currency pair, a cryptocurrency, or a commodity – like a precious metal, a foodstuff or a natural resource such as oil or gas – will rise or fall (hence the term “binary,” since there are only two possibilities) over a defined period of time. Because binary options trading resembles gambling, it is banned in many jurisdictions.
While legitimate, licensed binary options brokerages do exist, a plethora of online binary options scams sprang up in the ten years between 2008 and 2018. They may have called themselves brokerages, but almost all were unlicensed and unregulated. For that reason, they were not entitled to call themselves brokerages, just like someone who has never passed the bar exam cannot call himself a lawyer.
A handful claimed to be licensed, but inevitably those licenses were provided by an understaffed regulatory agency in an isolated, under-populated island nation whose professional procedures do not meet normative international standards. Others claimed to operate under a gaming license, an expired license, a license that was revoked, or even a completely counterfeit license.
While cryptocurrency exchanges are not binary options brokerages, there is one similarity. Scammers, including many who migrated from online binary options brokerages, have migrated into cryptocurrency.
Numerous cases have been reported of cryptocurrency exchanges (as well as cryptocurrency wallets) disappearing overnight, along with all the crypto they were holding at the time. Some of these scams have even advertised on Facebook and Twitter. Consumers are advised, therefore, to thoroughly investigate an exchange (and wallet) before choosing to do business with it.
MyChargeBack.com is owned and operated by Cactil LLC, an American dispute resolution consultancy firm headquartered in New York with a global focus and an international client base throughout North and South America, Europe, Africa, Asia, and Oceania. The MyChargeBack team, which has recovered more than $10 million in funds for its clients to date, is comprised of professionals with extensive financial, legal and regulatory backgrounds who assist victims of binary option scams retrieve their money.
MyChargeBack is able to accomplish that because it knows how chargebacks work and how to ensure that each client’s case will be presented effectively to the bank. Contact us today for a free consultation.
File a complaint today at: https://mychargeback.com/binary-options/
