For those hoping that Israel had come to terms with its “demons” will remain let down yet again. The new law does not prevent the scammers from continuing with their deceit, they have simply changed their disguise.
The new law in Israel has been passed, but the modifications introduced to the original bill render it less effective compared to the expectations of the eve before.
A crime network has developed around binary options in Israel, it could have been fought against only with a law that was transparent and tough. The concern is that the fraudsters that have until now done business by means of binary options will have no problems in circumventing a weak law.
The dramatic reality in Israel
Israel is the home of the software on which the whole Forex world is based. The playful developments in what was purely a military symbol, has finished with giving life to a programme that is of easy access and eye catching graphics.
The contract between dishonest businesses and their victims does not only happen through trading on online platforms, call centres of Israeli Forex businesses too represent a grave threat to investors because they give a voice to many fraudsters.
The recruitment takes part in every part of the world, brokers tempted by generous commissions.
Probably the farud and the fraudsters are driven by the same motivating force an easy way to earn money, but in all this honesty does not exist. The brokers are instructed to pretend to be that which they are not.
They pass themselves off as economic experts, lying about the place where they are calling from, as a result of Israel’s bad reputation, it is more profitable to say you are calling from a city connected with business (London, New York…) they are creating millionaires’ incomes and pressuring potential victims until they are worn down.
The initial bill
The bill as it was first conceived, would have put a halt to binary options. Binary options would have been banned completely and similar products would have ceased to be marketable. Moreover, the producers of the software would have been under investigation, for providing the “weapons “for the fraudsters.
The original text drawn up by the Israeli Securities Authority together with the Justice Ministry and the prosecutor general’s office, could have banned Forex and CFD (Contracts for Difference) in Israel, and could have prevented other businesses from offering their services to clients abroad without a license.
Parliament’s drafts in February 2017 established that businesses trading online operating in Israel and that target clients from abroad have to have a license from the country in which they operate.
It is a shame that when the voting stage was reached, also the most prominent members of the Knesset agree, the text of the law had already lost his credibility, impoverished, during the process in parliament from all those cuts to enable its approval.
The cuts were vital without which the approval of the Knesset would not have been attained.
What does the law now say
The law that has been approved by the Knesset, bans all binary options’ operations , but does not require trading business that sell other financial products online to obtain a license in the country in which they operate.
The only good news to note is that those that are caught operating in a fraudulent manner with binary options will have three months to close up shop, they will then be placed under arrest and consequently imprisoned for two years.
The experts fear that it will be extremely simple for those who already operated in the sector to reorganize themselves and sell some other product.
Canada, one of the countries most badly affected by scammers in Israel, has denounced what is already an ongoing metamorphosis of binary option’s brokers, who without waiting for the law to be implemented (opening months in 2018), began to change their products for the CFD and cryptocurrencies.
A billionaire turnover
Estimates suggest that the Israeli binary options industry has generated between 5 and 10 billion dollars each year. Tens of thousands of employees and hundreds of businesses.
Having pointed the finger at binary options some of the companies have closed, others have moved abroad, often to Cyprus and the Ukraine. The more determined brokers simply change disguise, moving their fraudulent activities to other sectors.
From abroad they continue to make profits, suspicious of the way in which Israel, its Parliament and its political forces address the problem of fraud associated with Forex.
The most recent excellent arrests are not enough, nor the new law to restore trust in a country that has given too much room to a type of modern and international criminal activity.
Sometimes one deals with blatant criminal acts, not elaborately drawn up that consist of the illegal treatment of clients’ money, without giving them the chance to recover it.
It is more difficult to show the manipulation of the online platforms that are based on a sophisticated system of software management. This uproar has a at least favoured the intervention by the FBI and of other foreign police forces.
Boccadutri International Law Firm offers assistance to those who have suffered losses in Forex. We are able to guide you be it in criminal or civil matter connected with this market. Do not hesitate to contact us here to find out more.