Questions & Answers

How does USCIS view binary options as an EB-5 investment source?

I am interested in investing in the EB-5 program and my source of investment is from binary options. Is this acceptable for EB-5 investment? Will it cause any extra scrutiny from USCIS on my application?

Answers

• A Olusanjo Omoniyi

  Immigration Attorney

  Answered on April 8, 2016

  It is not likely to draw scrutiny because of the nature of binary options. All in all, binary options are legal investment methods. If the need arises, be ready to explain what binary options represent and how the options work. Generally, a binary option hedges on an all-or-nothing basis almost like a bet, which is legal. For example, a binary option involves an investor waging (or betting) that his/her investment on a particular stock will go up at a certain price, say $100 per stock; if at the point of call, the price has gone up beyond $100, then the investor cashes in at a higher price, but if the price is lower than $100 the investor loses everything. This trading style as the source of your fund should not draw unnecessary scrutiny, but be ready to explain it in case any regional center requests an explanation.

• Julia Roussinova

  Immigration Attorney

  Answered on April 6, 2016

  Lawful investment/trading activities may be used to demonstrate lawful source of funds. You would also need to demonstrate your initial funds used for procuring binary options were from a lawful source of funds. I would also recommend explaining in your I-526 petition what binary options are.

• John J Downey

  Immigration Attorney

  Answered on April 4, 2016

  I am not familiar with binary options, but as long as the sources of funds are from lawful sources, they should be accepted.

• Fredrick W Voigtmann

  Immigration Attorney

  Answered on April 1, 2016

  An EB-5 investor has the burden of proving by a preponderance of the evidence that the invested capital was obtained lawfully. Therefore, any legal source of funds, including various forms of stock trading, currency speculation, etc., could be considered lawfully sourced capital as long as the activity is legal. Also, you likely will have to provide some evidence of how you lawfully obtained the capital to purchase the options to begin with. All evidence must be documented and must clearly demonstrate your ownership of the initial funds and the investment earnings.

• Raymond Lahoud

  Immigration Attorney

  Answered on April 1, 2016

  If the money invested is from a lawful means, then it is acceptable. Taking it a step back, however, you would have to show the investment made in the binary option was also derived from a lawful source.

• Robert Lee

  Immigration Attorney

  Answered on April 1, 2016

  As long as there is a paper trail. Also, you must verify where the funds for the initial investments came from. No extra scrutiny - financial products for the source of funds is common.

• Vaughan de Kirby

  Immigration Attorney

  Answered on April 1, 2016

  Based on the assumption that binary options are a legitimate investment vehicle, profits can serve as a source of investment funds. You must document both the profit/distribution you received as a result of your investment, as well as the source of the investment funds you used to purchase the options. I recommend you consult with an investment immigration attorney before you take any action.

• Michael G Homeier

  Securities Attorney

  Answered on April 1, 2016

  As a corporate/securities lawyer, in my firm's practice outside of EB-5, we are aware of these instruments, which while not rare are relatively obscure. In EB-5, I doubt USCIS has dealt with binary options. At least it has not yet to my knowledge. I am unaware that any of the over 250 EB-5 projects my firm has worked on over the past 6.5 years have included investors who have used binaries, and these have involved hundreds of investors (though of course immigration counsel would know more definitively). Since these options are a legitimate and fairly well-known (in financial circles) instrument, assuming CIS has not yet been introduced to binaries, I would venture that it would accept funds derived from such options, whether cash-or-nothing or asset-or-nothing - provided CIS understands what they are. In the event of any petition disclosing a source of funds including profits from such options, just in case the agency has not yet been exposed to binaries, I would strongly advise including an explanation of what they are and how they work, and where they are common (American Stock Exchange, forex, etc.). I would expect CIS would look beyond the options to see whether the funds used to purchase the options were themselves lawful, in which case profits derived from the options should be lawful also, derivatively. Again, to be safe, I would advise not forgetting to include an explanation of binaries, plus a clearly lawful source of the funds used to purchase the binaries.

• Bernard P Wolfsdorf

  Immigration Attorney

  Answered on April 1, 2016

  I doubt it. How do you show job creation through investment in binary options?