TEL AVIV, Israel โ This piece draws on the OSINT investigation by the International Burke Institute (IBI), “Scam State” (Sovereignty Threat Brief, June 2026)
When Eurojust dismantled a network of call centers in Dnipro and Kyiv in December 2025 โ operations that had been fleecing European retirees โ it was reported as a Ukrainian problem. That is only half right. The commercial, technological, and human DNA of this industry runs not to Kyiv but to Tel Aviv and Ramat Gan, to Israel’s binary-options business of the 2000s and 2010s. That is where the model was assembled and refined before it spread to Ukraine, Georgia, Bulgaria, Albania, and Cyprus.
One detail explains the rest. Israel barred its brokers from selling binary options to Israelis in March 2016. It barred them from selling to foreigners only in October 2017. The eighteen months between those two bans are the whole story in miniature: the domestic public was protected first, and the rest of the world remained, officially, fair game for another year and a half.
What the “Wolves of Tel Aviv” Were Selling
By the mid-2010s, Israel had become one of the world’s hubs for binary options. From the outside, it looked like fintech: a simple bet on whether an asset would rise or fall, available to retail investors anywhere. On the inside, a large share of the market ran as a boiler-room operation โ the client wasn’t sold an investment, but a simulation of one.
The Times of Israel’s reporting โ by Simona Weinglass, in a series that began in March 2016 under the headline “The Wolves of Tel Aviv” โ described an industry of hundreds of companies employing thousands of Israelis and, by various estimates, fleecing victims worldwide of billions of dollars. The offices are clustered in Ramat Gan, along Jabotinsky Street, and inside the Moshe Aviv Tower. The largest platform provider, SpotOption, later became the target of a U.S. Securities and Exchange Commission suit; dozens of operatives were charged by American prosecutors. A police superintendent told a Knesset hearing bluntly that online investment fraud had swollen organized crime in Israel to “monstrous proportions.”
The mechanics had been refined into an assembly line. A target saw an ad promising fast money โ often on Facebook, Google, or a fake news site. Once registered, a “broker” called, using an invented name, a fabricated biography, and a local number spoofed through internet telephony. The client watched his “balance” climb on a trading dashboard and was talked into depositing more. Then he was handed to a “retention desk,” where the rest of his savings were squeezed out. When he tried to withdraw, a second round began: documents, fees, taxes, “security checks” โ and sometimes an accusation that the client himself was the fraudster.
From “Investment” to a Managed Reality
What matters most here isn’t the lie itself but the fact that the operator didn’t merely lie โ he built an artificial reality for the victim. In that reality, the “investment is growing,” the “broker is helping,” the “regulator demands a tax,” the “bank is blocking the transfer,” “you need to top up now.” The person stopped acting within the institutional space of his own state and began acting in an environment engineered by an external criminal structure.
That is why this is more than an economic crime. It is behavioral control: the victim is stripped of the ability to tell a real bank from a fake one, a genuine regulator from a forged letter, an investment platform from a simulator.
A Ban That Didn’t Kill the Industry โ It Exported It
The 2017 ban didn’t destroy the industry; it pushed it out of Israeli jurisdiction. Part of the talent pool, the scripts, the marketing playbooks, the payment solutions, and the workplace culture migrated to Eastern Europe and the post-Soviet space. A new geography emerged: Kyiv, Dnipro, Tbilisi, Tirana, Sofia, and Cyprus. Israel ceased to be the sole center, but it remained the source of the model and part of the network’s infrastructure.
In other words, the ban produced not a moral cleansing of the market but its transnationalization. The technology became mobile and found exactly what it was looking for: weaker jurisdictions, more pliable law-enforcement environments, cheap multilingual labor, and convenient routes to move money out.
Milton Group: Where the Israeli Method Met Ukrainian Scale
The clearest bridge between the two phases is the Milton Group case, exposed in 2020 by a consortium of OCCRP and Sweden’s Dagens Nyheter. This was no ring of small-time phone hustlers but an industrial call center in one of Kyiv’s prestige office towers, Mandarin Plaza, complete with a CRM, scripts, pseudo-brokers, fake investment brands, payment intermediaries, and crypto. An employee, appalled by what he saw, spent months smuggling out documents โ including a list of more than a thousand victims; reporters in dozens of countries tracked down and interviewed roughly 180 of them.
The method mirrored the Israeli one down to the details, updated for the technology. Victims were sold a dream off real ads, had remote-access software (AnyDesk, TeamViewer) installed on their computers, and watched a rising balance get painted for them. When the money “got stuck,” a second crew stepped in โ the “recovery agents,” who promised to return the funds for a fee and a tax. The money moved through Western Union, bank cards, private accounts at a UK financial firm, and cryptocurrency โ operators earned a higher commission on crypto, because it is harder to trace. A portion of the card payments, according to Milton’s internal documents seen by the reporters, ran through a Cyprus-based payment gateway called Naspay.
Naspay belongs to David Todua, a Georgian-born Jew who emigrated to Israel in the 1990s and now lives in Cyprus. A whistleblower identified him as the man behind Milton; at a company party, he was introduced as its “father.” Precision is required here. His name does not appear on the company’s official documents โ on paper, the owner is another Georgian national, Irakli Dadivadze โ and Todua flatly denies any role in Milton, formal or informal, insisting that Naspay does not process payments but merely “transfers information” between websites and banks. OCCRP found no evidence that he owns Milton. Milton’s CEO, Jacob Keselman, who called himself “the Wolf of Kyiv” on Instagram, likewise denied any fraud, claiming the firm only provided IT support to “brands.”
Those caveats matter beyond their legal function. They are the point of the story: the industry is built so that shell owners, offshore wrappers, and payment intermediaries stand between the victim’s money and the actual beneficiaries, and so that any provable chain breaks before it reaches the top. By way of illustration: the same Milton brands, in OCCRP’s reconstruction, were sold through a network of 61 companies registered at a single Tallinn address and promptly bought up by offshore firms in St. Vincent.
The Israeli source supplied the method. The Ukrainian environment supplied the scale. Europe’s financial and digital systems supplied the field of victims. Offshore structures and crypto provided a way to dissolve the money.
Why This Is a Sovereignty Question, Not a Consumer-Protection One
Financial fraud is usually filed under “crime” or “consumer protection.” The frame is too narrow. A mass investment-scam industry strikes the state from several directions at once, and they all converge on a single point.
Savings drain out of households, retirees, and small businesses โ not always a macroeconomic shock, but a steady leak, and a mounting load on banks, police, courts, and regulators. In parallel, trust erodes: the victim confronts not just a criminal but the impotence of his own institutions, which failed to recover the money or reach the organizers. And all of it runs on someone else’s technical infrastructure โ spoofed numbers, fake websites, phantom addresses in London or Zurich, crypto wallets โ which the national state cannot stitch into a single picture faster than the money disappears.
This is the financial erosion of sovereignty. It requires no occupation. An outside actor steers the financial behavior of citizens inside another jurisdiction at scale โ without a single soldier on the ground.
Asymmetric Sovereignty: Protect Your Own, Harvest the Rest
The Israeli case is valuable because it breaks a convenient myth. Global scam activity is usually imagined as a product of “failed states” and poor criminal zones. Here, the technology was born in a developed country โ one with a strong security sector, advanced fintech, skilled labor, and deep integration into Western markets. It was precisely that combination โ technical sophistication, linguistic flexibility, aggressive marketing, legal camouflage, international mobility โ that made the industry so dangerous.
The claim that the Israeli state formally created this industry is unsupported, and there is no need to make it. The problem lies elsewhere, and it is documented: Israeli jurisdiction allowed this industry to operate against foreigners for years while shutting it down for its own public earlier and more thoroughly. That is the gap between March 2016 and October 2017. The result was a regime of exported harm โ the problem was gradually contained at home while the outside world remained a hunting ground. For the victim states, it means their financial and cognitive sovereignty was left open to an industry that grew up inside a Western ally.
Don’t Confuse Intent With Effect
To recognize the damage to sovereignty, there is no need to prove that intelligence services ran the binary networks. Organized crime can erode sovereignty as effectively as a state operation if it works at scale, across borders, with sophistication, and with impunity. From a victim state’s vantage point, the difference between a “private” and a “state” scheme is secondary when the outcome is the same: citizens lose their savings, banks lose trust, police don’t investigate, courts can’t reach the beneficiaries, and society learns to distrust its own institutions.
The line between fraud and coercion, meanwhile, is thinner than it looks. After 2022, claims emerged โ still unverified, and coming mainly from Russian security services โ that the same Kyiv infrastructure was used in psychological operations. The documented core remains criminal, not state-run, but the technical suitability of such infrastructure for pressuring people across borders is a separate cause for concern.
What This Means for Western Policy
Western policy likes to sort threats into tidy boxes: cybercrime here, organized crime there, corruption in one drawer, hybrid warfare in another. The Israeli-Ukrainian genealogy of the scam industry shows that the partition is obsolete. A single ecosystem links ad platforms, internet telephony, fake investment brands, offshore companies, payment gateways, cryptocurrency, corrupt officials, banking weaknesses, and psychological exploitation.
For the EU, this is especially awkward. Israel is an ally; Ukraine is a country Europe backs politically, financially, and militarily. Yet it was out of Israel’s binary-options milieu and Ukraine’s call-center infrastructure that the schemes now fleecing European citizens grew. That doesn’t cancel the alliances. But it leaves no room for political immunity for states from which โ or through which โ systemic financial harm flows, ally or not. Dismantling this industry is a logical, measurable demand to attach where Brussels already has leverage: in the rule-of-law accession chapters opened with Ukraine and Moldova on June 15, 2026.
Modern sovereignty is eroded not only by missiles and sanctions. It is eroded when a fake broker is more persuasive than a real bank, when a counterfeit platform outguns a state regulator, and when money leaves through a chain of jurisdictions faster than the police can open a case. Israel’s binary options industry was one of the first large laboratory specimens of this undeclared kind of war โ and it showed that financial fraud cannot be a marginal crime but an exportable technology for dismantling another country’s trust, money, and institutional autonomy.
Roy Jankelowitz is a senior researcher at the Dor Moriah Policy Institute, a blogger, and a sports journalist at the โIsrael Sportโ website.
