RECENTLY, Ducky Bhai found himself behind bars. The charge: his promotion of ‘binary trading’ apps. To understand how these betting rackets operate, we first need to examine the legitimate practices they mi­­mic to create an appearance of credibility.

Stock trading has long since moved from the shouting pits of Wall Street to digital dashboards accessible across the world. Today, millions of people buy and sell equities, bonds, commodities, and currencies online through regulated brokers. Platforms like Interactive Brokers in the US, and similar licensed services across Europe and Asia, are bound by strict laws that ensure trades are executed on actual exchanges, client funds are segregated and investors protected. These legitimate platforms make their money from commissions, spreads or service fees.

Thus, when you invest through these licensed platforms, you acquire ownership in the underlying asset. Buy shares of NVIDIA, for example, and you hold a real stake in the company, complete with rights to dividends and the potential to profit if the stock price rises. The transaction is transparent, recorded on an exchange, and governed by rules protecting both the company and the investor.

In Pakistan, the same principle applies. When you buy shares of a company through PSX via a licensed broker, you are acquiring actual equity in that business. Your investment and ownership are recorded, and your returns depend on the genuine performance of that company.

There’s no transparency in how ‘binary trading’ platforms operate.

Unlike licensed brokers, these so-called binary trading platforms never actually take your money to a real market. The charts they display may track the price of equities and assets like NVIDIA or gold, but that is where the similarity ends. Behind the glossy interface, there is no purchase of shares, no settlement on an exchange and no custodial record of ownership. Instead, the entire transaction happens inside the app itself, an opaque, over-the-counter-style arrangement where users place bets on whether a chart will move up or down in the next few minutes.

In these systems, profits and losses are not determined by market mechanisms, but by the platform’s system, often governed by algorithms that ensure the house always has the edge. In effect, what looks like trading is nothing more than gambling dressed up in financial jargon.

First, there is no transparency in how these platforms operate. While they mimic the price action of real assets like gold or oil, there is no guarantee the numbers are not stacked against the user. The algorithms are fully controlled by the platform, which means the ‘market’ you see could be nothing more than a rigged simulation.

Second, these platforms deliberately place themselves outside the reach of strong regulators. Instead of registering in jurisdictions like the US or Europe, where securities laws are strict and enforcement is aggressive, they base themselves in countries with lax or minimal oversight. This keeps them safely out of the legal reach of authorities most capable of holding them accountable.

Third, the business model relies on targeting vulnerable markets, such as India, Pakistan and Bangladesh, while avoiding regions like the US and the EU. They know regulators in these markets are less likely to clamp down quickly, making it easier to prey on large populations of young, internet-savvy users looking for quick profits.

Disturbingly, the financial side of these operations is as murky. Many take deposits in cryptocurrencies, and withdrawals are routed through shady, individual-run exchanges. Not only are such exchanges often illegal, but they can disapp­ear overnight with your money, leaving no trail of ac­­c­oun­­-ta­bility. In the worst cases, these flows of funds may even feed into or­­g­an­i­s­­ed crime networ­ks, blurring the line between finan­­cial fraud and ou­­tright criminal enter­prise.

Naturally, with all this dodgy behaviour, these platforms cannot afford to buy slots on Bloomberg or CNBC the way regulated firms do.

Instead, they rely on an underground economy of influencers and YouTubers, dangling referral codes and flashy promises of instant wealth, an ecosystem built on hype and deception.

So next time an influencer in a Land Cruiser boasts about getting rich through ‘trading’ on some app, remember that unless they mention regulation and legitimacy, they’re selling you illegal betting. You risk losing your money in an instant, and possibly fuelling crimes from fraud to drugs, even terror.

Law enforcement and media, too, should stop calling these platforms ‘trading’ or ‘forex’ apps; the former are legitimate, regulated structures that add substantially to our economy, while the latter are nothing more than gambling dens in disguise, akin to organised crime.

The writer is founder of Media Matters for Democracy.

Published in Dawn, August 19th, 2025