Frequently Asked
Questions
The following are questions that
the customers of the Defendants to this action may have
at this stage in the case and the answers to those
questions. The Receiver provides answers to each
question below but may revise these answers as she
obtains further information and documents related to the
Defendants, their assets and their business operations
that are the subject of the CFTC’s Complaint. Therefore,
the Receiver encourages investors to visit this page
periodically to see if the Receiver has revised any of
these questions and answers or posted additional
questions and answers.
Q.
What is a
binary option?
A.
As explained in the CFTC’s Complaint, a binary
option is a type of option contract in which the payout
depends entirely on the outcome of a yes/no proposition.
The yes/no proposition typically relates to whether the
price of a particular asset will rise above or fall
below a specified amount at a specified date and time.
For example, the yes/no proposition might be whether the
price of silver will be higher than $33.40 per ounce at
11:17 am on a particular day. Once the option holder
acquires a binary option through payment of a premium,
there is no further decision for the holder to make as
to whether or not to exercise the binary option because
binary options exercise automatically. When the binary
option expires, the option holder is entitled to a
pre-determined amount of money if the customer has made
a correct prediction. If the customer has made an
incorrect prediction, he or she gets nothing and loses
the premium paid.
Q.
What is a
receiver?
A.
A receiver is an independent, impartial
fiduciary appointed by a court, tasked with receiving,
managing, preserving and marshaling (i) assets that are
the subject of the lawsuit giving rise to the
appointment of the receiver, pending the final
disposition of that lawsuit, and/or (ii) endangered or
transferred assets in which the investors, customers
and/or creditors of the defendant to the lawsuit have an
ownership or other beneficial interest.
Q.
How do I report this matter on my tax returns?
A.
The Receiver and her
professionals are not permitted to provide any form of
tax advice or counseling to any investor. Investors are
encouraged to contact a tax attorney and/or accountant
for any questions they may have regarding how to report
this Receivership and their investments with the
Defendants on their tax returns.