COVID-19 didn’t give the FinTechs a break. Not the good ones for business reasons and not the less good ones for regulatory reasons. In Europe, the revocation of the license of Bruc Bond UAB (formerly Moneta International UAB) and the resignation of the founders and board members of the Dutch ING subsidiary Payvision caused quite a stir in April. Both companies were highly controversial because of their involvement as payment processors in the fraudulent binary options and brokerage industry. Now another FinTech has been hit with the Australian iSignthis Ltd and its Cyprus-based subsidiary iSignthis eMoney Ltd, a regulated EU e-Money Institution.
The Binary Options Legacy
Like so many other payment processors, the Australian FinTech conglomerate iSignthis and the related group of companies were also massively involved in Israeli binary options scams. In particular, the group was apparently closely connected to the Israelis Yossi Herzog and Kobi Cohen, who are now being indicted in the USA in the Yukom Case around the former CEO Lee Elbaz. Both Herzog and Cohen are searched for by the US Government for criminal charges and the US Commodity Futures Trade Commission (CFTC) for regulatory violations. Their whereabouts are unknown.
According to various court documents in Australia, iSignthis has facilitated broker scams like TraderQ, iTrader, iTrader Global, or OTCapital with their payment services. Behind these scams and associated with them are Herzog, Cohen, and their AGM Markets Ltd and AGM Markets Pty Ltd, as well as their Israeli compatriots Ido Fishman and Gil Yakir Bachar and their Israel, registered Gal Media Trade Ltd.
roblems with Australian Securities Exchange ASX
Founded in 2013 as a software provider, the iSignthis Group today positions itself as a FinTech, RechTech, and a banking software solution provider. The many subsidiaries in different jurisdictions with different purposes makes it a rather non-transparent group.
The shares of the Australian iSignthis Ltd are listed on the Australian Securities Exchange ASX with a co-listing on the Frankfurt Stock Exchange with the symbols ISX and TA8. Founder and CEO John Karantzis is considered an energetic and rather controversial FinTech entrepreneur. The ASX has already suspended trading in iSignthis shares since mid-March 2020 due to alleged violations of compliance rules. In addition, iSignthis is also said to be involved in extensive share manipulation, according to the ASX. iSignthis has sought an interim injunction against the suspension of trading in the Australian Federal Court. On April 30, 2020, the Court, however, dismissed ISX’s application for an injunction and ordered ISX to pay ASX’s costs.
The complexity of the iSignthis corporate configuration and the relations as well as revenue streams between the different entities in different jurisdictions was subject to ASX investigations and led to the suspension of trading due to unresolved issues.
Since March 2020, iSignthis CEO Karantzis has also been the interim CEO at AXS’ competitor National Stock Exchange (“NSX”), Australia’s second-largest ASIC licensed Tier 1 market operator for securities. He, therefore, attributes the problems with ASX to the fact that he holds the position with NSX.