Has The Sterling Currency Group Raid Rocked Your Confidence?Many buyers of the Iraqi Dinar are nervous about who they buy Dinar with after the Sterling Currency Group FBI Raid.
Sterling was probably the most well known among all the Iraqi Dinar dealers out there. In addition to selling physical currency, Sterling Currency Group was the leading seller of Dinar Options or Reserves as well.
For those of you who don't know, what a Dinar option or reserve is, it's when you buy the right to purchase Iraqi Dinar within a 30, 60, or 90 day period. Different programs set different prices, but essentially you would pay Sterling Currency Group, or whatever dealer you bought an option from say $200. You received nothing for that $200. What you purchased, is the right to purchase a set amount of Iraqi Dinar within the option period which could be 30 days, 60 days, or 90 days.
Now hypothetically speaking, if you bought a 30 day option for $200, and on the 15th day of your option the Iraqi Dinar increased in value and was now worth say $10,000. You would have the option to purchase that Dinar at the price of say $1,000 per million as opposed to paying the current price which in this scenario is $10,000.
Now many people say it's never a good idea to buy options. This was for two reasons. First of all your entrusting someone else to hold onto your Dinar. What would happen if Sterling sold more options than Dinar they had in stock? Well, when people went to cash in on that option, there would be a lot of upset option buyers who would be told, tough luck we oversold, here's your $200 back.
Aside from that though, buying an option is basically gambling on the fact that you can guess when the Dinar will go up in value. It's akin to trying to time the stock market, which we all know is basically impossible.
Furthermore, options in many people's minds have always been a grey area. The same way stock options are "securities" many have felt that Dinar options were also securities. In order to sell securities one has to be licensed and registered to do so, and the "investment" in that security must have certain disclosures.
Obviously no Dinar dealers were licensed to sell securities, nor did any go through the proper channels of putting together numbers and disclosures. Last summer DinarCorp was singled out by the securities and exchange commission for selling unlicensed and unregistered securities. Their business was shutdown and their website was seized by the FBI. Within a day of this happening all other Iraqi Dinar dealers immediately pulled options from their websites.
All this however is kind of besides the point. The main point of this post however is that many customers who either had outstanding options with Sterling, or whome sent in currency that hadn't been shipped out prior to Sterling Currency Group being raided by the FBI is apparently out their money.
Sterling claims they have tried to get the government to either release the money or allow them to ship out those orders or refund those reserves, however have stated the government will not allow them to do so. This leaves many Dinar buyers out lots of money, I've personally spoken to some people out as much as $15,000.
Some people online claim to have gotten through to Sterling Currency Group representatives who seem to be telling people it's not likely you'll ever get that money back and feel lucky you did not have more tied up.
This is unfortunate. Many Dinar buyers who purchased from Sterling Currency Group have questioned whether there currency is authentic. There doesn't seem to be any doubt that SCG was selling authentic currency. The problem seems to lie in their internal business practices such as how they did their banking as well as how they did some of their advertising and promotions.
Things seem to move very slowly through the court system so we will probably see within a few years how this all pans out.