Gal Barak – Maybe ‘Mr Green’ but for sure not ‘Wolf of Sofia”

A few weeks ago, Gal Barak‘s Austrian lawyer submitted a comprehensive statement to the competent economic and corruption state prosecution office in Vienna. This reading is remarkable for several reasons. On the one hand, Gal Barak explains the essence of his business through his lawyer. In addition, he explains that the actual perpetrators have been and still are the operators of the white-label broker platforms Tradologic or PandaTS platforms. We have gone through the statement with our lawyer and may explain our understanding.

It’s Betting and not Trading

Allegedly, Gal Barak entered the binary options broker scene a few years ago and was perfectly aware that it’s a regulated business. But he is not so sure about the applicable regulation for his business. It may or may not be financial services or gambling. Whatever, he fully complied with whatever regulation. He is a good guy, you see?

As a matter of fact, none of the broker sites have been regulated by a financial supervisory authority or gambling authority. Either way, they conducted unauthorized business.

Furthermore, Gal Barak explains in his statement that the XTraderFx and the other illegal broker sites were not investments or trading, but high-risk bets on future asset prices. The clients would have been very well aware of the betting nature along with the high risk of total loss and the minimal chance of profit.

Clients would have sought above all the thrill and not so much the returns!

Purportedly, according to Gal Barak`s statement the well-behaved agents in the call centers (boiler rooms they were not) had always drawn the clients’ attention to the betting and high-risk nature of their offerings. The call center people actually “helped” and “supported” the customers wherever possible by no means they pretended to be experienced traders and requested any deposits from the customers. Also on the websites – which unfortunately are no longer available – customers were made aware that they were actually betting and not trading. Interesting, isn’t it?

In the opinion of Gal Barak, his business compares best to the sports betting platform Mr Green. Moreover, his websites would have been only a sort of frontend for the ultimate operators of those betting platforms like Tradologic or PandaTS. Consequently, Gal Barak and his E&G Bulgaria would have been only a sort of marketing channel for those betting platforms which are actually the perpetrators. Interestingly, Barak forget’s to mention that he is the director of Tradologic and controls the company with his friends Gery Shalon and Vladislav Smirnov. And he also forgets about the money of the victims, that was just with him – but who cares about these unimportant details.

A separate report will be published on Barak’s view on PandaTS and Tradologic soon. Under no circumstances, however, XTraderFX and the other schemes would have offered any unauthorized investment and trading products according to Gal Barak. And the customers would always have been able to withdraw their money (their wager and their winnings) everything was paid out on first request. But unfortunately, the customers very often had bad luck … they are just losers.

We have looked at the web pages in the Web Archive (this is not difficult). The pages are peppered with words like Investing, Trading, Trader and the like. Clients are offered the prospect of high returns and a better life.

Forensic Websites Analysis

XTraderFX

Platform Slogan: INNOVATIVE DIGITAL ASSET TRADING – Enter the most dynamic and expanding industry

GPay LTD, 18 Stoke Road Slough, England SL2 5AG. Trading cryptocurrencies can generate profits, but it can also carry a high level of risk. It is therefore not suitable for all investors. Traders are recommended to enter the markets with a money management system as well as take expert advice in order to avoid incurring losses and protect their investments. Cryptocurrencies can be volatile and unpredictable; therefore XtraderFX advises that traders do not trade using funds they cannot afford to lose. Before trading, XtraderFX recommends that clients carefully consider their investment objectives, trading skills and risk appetite. Please read our terms and conditions before entering the world of cryptocurrencies (Source: XTraderFX website)

OptionStarsGlobal

Platform Slogan: Start Living The Real Life – TRADE OPTIONSTARSGLOBAL

New Markets S.A address is Novasage Chambers, Level 2, CCCS Building, Beach Road, Apia, Samoa (hereinafter “Subsidiary”). Binary options trading involves significant risk. We strongly advise that you read our Terms & Conditions. Although the risk when trading binary is fixed for each individual Trade, the trades are live and it is possible to lose an initial investment, particularly if a trader chooses to place his entire investment to a single live trade. It is highly recommended that traders choose a proper money management strategy which limits the total consecutive trades or total outstanding investment (Source: OptionStarsGlobal website)

Have you counted the terms “trading“, “trade“, or “investment“? Have you found the term “betting“? Neither did we!

Reading through the text on the website and the respective terms and conditions, it becomes perfectly clear that XTraderFX, OptionStarsGlobal and the other Gal Barak schemes acted unauthorized and hence illegally offered financial instruments and asset trading. Allegedly, the illegal broker sites provided the traders with all expert tools to become rich-quickly with low risk.

Clients my be Losers but not Victims

Now comes the really cynical conclusion. According to Gal Barak and his lawyer sites like XTraderFX or OptionStarsGlobal are betting sites, not trading or investment sites, clients may have lost all their money but were not victims of fraud. And in the first place, customers would have been looking for the thrill of betting and not for seeking returns.

The call center agents never called the customers and asked for further investments. Rather, these agents had repeatedly pointed out to customers that any further “bets” meant a corresponding risk. The money was not taken away from the customers, but they simply lost it with their bets. That’s the price for the thrill.

FinTelegram is to blame

In his opinion, FinTelegram and EFRI, in addition to Tradologic or PandaTS, are identified as the culprit for the losses of customers. FinTelegram and EFRI have criminalized Mr. Barak’s completely legal betting business and ultimately brought down the scheme. Only the collapse of XTraderFX, SafeMarkets, OptionStarsGlobal or GoldenMarkets caused by FinTelegram and EFRI have damaged the clients.

Preliminary Conclusion

We will shortly bring another analysis of the opinion of Gal Barak. In this respect, as a medium in the sense of the investors concerned (not as a court or authority), we can state that Gal Barak‘s argumentation about cynicism cannot be surpassed. Of course, the services on XTraderFX or OptionStarsGlobal were sold as trading or asset trading or investment. Of course, high returns were promised to the clients. Of course, the boiler room agents have urged customers to make additional deposits.

Customers were also offered virtually risk-free trades, which would allegedly have been “insured trades“. FinTelegram has numerous proofs of this. In many cases, customers were seduced to make additional deposits with false promises and risk-free trading. The customers were promised a carefree life and wealth and not any sort of “thrill”.

In one, Gal Barak is completely right – the money deposited by clients has actually not been used for trading. It was immediately transferred to the accounts of Gal Barak companies and used for the operation of the fraudulent business as well as for the high living expenses for him and his guys and of course to pay the lawyers and to make donations to the Jewish community. The alleged trades were apparently sort of emulated on the platform with the trading software and never submitted to authorized brokers. The profits shown in the dashboard were only available in pixels but never in money.

The U.S. FBI and prosecutors have already recognized the fraudulent nature of broker sites such as XTraderFX or OptionStarsGlobal. Currently, 5 Israeli people are indicted in the Yukom case around Lee Elbaz. Four of them worked in such boiler rooms as agents and defrauded clients by millions. You just have to read the press release of the U.S. Department of Justice to understand Gal Barak’s business.

So, where’s the money now?

We will answer this question shortly in a separate report.