The Knesset passed a law Monday night banning the sale of binary options after the controversial industry faced widespread complaints of fraud. Binary options allow investors to buy and sell online, betting on currency fluctuations, commodities or shares. Transactions are usually short-term, and investors sometimes only have minutes to decide, for example, if the price of the dollar against the euro will go up or down. The new legislation, given final approval late Monday, bans Israeli firms from selling binary options to clients abroad.

Your support for our work by joining The Times of Israel Community helps ensure we can continue to do so. So now we have a request. But as the journalism we do is costly, we invite readers for whom The Times of Israel has become important to help support our work by joining The Times of Israel Community. A Facebook ad for an Israel-based binary options firm posted April 19, Screenshot.

Fifty-three Knesset members voted for the law and none voted against it. Knesset lawmakers vote to ban binary options on October 23, Lee Elbaz LinkedIn. Get The Times of Israel's Daily Edition by email and never miss our top stories. Newsletter email address Get it By signing up, you agree to the terms. Kulanu party MK Rachel Azaria. The top of the FBI website on March 15, , dominated by a binary options fraud warning. Screenshot: FBI. The late Fred Turbide, who took his own life after he was fleeced by an Israeli binary options firm, with his wife Maria Chaves-Turbide Courtesy.

Thank you, Tal Schneider, Political Correspondent. Thank you, David Horovitz, Founding Editor of The Times of Israel. Most Popular.

Your support for our work by joining The Times of Israel Community helps ensure we can continue to do so. So now we have a request. But as the journalism we do is costly, we invite readers for whom The Times of Israel has become important to help support our work by joining The Times of Israel Community. Illustrative view of high-tech office buildings in Herzliya Pituach, Israel, December 12, Get The Times of Israel's Daily Edition by email and never miss our top stories.

Newsletter email address Get it By signing up, you agree to the terms. Thank you, Tal Schneider, Political Correspondent.

Thank you, David Horovitz, Founding Editor of The Times of Israel. Most Popular. Orthodox parties demand legalization of gender-segregated public events. close popup. Sign in or Register. Or Continue with By registering you agree to the terms and conditions. Send me The Times of Israel Daily Edition. Register to continue.

Belgium is the first European country to outlaw the offering of binary options to its citizens, and only the third country in the world to do so, after the United States which permits binary options trading only on domestic, regulated exchanges and Israel. The ban became law on August 8 and will go into effect on August In reality, however, these are products that are marketed aggressively and are extremely risky, often involving transactions over a very short period and without any connection to the real economy.

A spokesman for the FSMA told The Times of Israel that all binary options firms, including those regulated in Cyprus, will be banned from operating in the country. Companies that offer leveraged forex and CFD trading will also be banned from approaching Belgians. The FSMA is not banning all forex and CFD trading but rather the kind with leverage, such as contracts for difference CFDs and rolling spot forex contracts.

If the dollar, say, goes down by one percent, even for a fraction of a second, the trader can lose all their money. The company sells their position at a loss and closes it. On the other hand, if the dollar goes up by 1 percent, the trader can double his money.

However, statistics being what they are, a highly leveraged client will often be wiped out quickly. A spokesman for the FSMA told the Times of Israel that the decision, unprecedented in Europe, to bar overseas binary options firms from approaching its 11 million citizens, came about after the Belgian regulator received a growing number of complaints from Belgians regarding binary options and forex companies.

In , it received complaints, in the number increased to and in the first half of it received complaints. So far, Belgians who have come forward have lost approximately 6 million euros to binary options and forex fraud, the spokesman said, while stressing this figure is probably the tip of the iceberg.

In neighboring France, where the population is six times as large, police have said losses to French citizens from binary options and forex scams exceed 4 billion euros.

France recently announced it plans to ban all electronic advertising, including online, television and radio, of binary options and forex products. It has not yet taken the step of banning them entirely. This regulation will help combat such offers. Asked how the Belgian government plans to enforce the ban, in light of the fact that the US government banned non-exchange binary options several years ago and yet many companies continue to solicit American citizens, the FSMA spokesman said the regulator would employ administrative sanctions, and cited a case last week where the FSMA reached a settlement with Cyprus-regulated investment firm Rodeler Limited, which owns the brand 24Option.

Rodeler offered to settle with the FSMA for the amount of euro , for offering binary options, CFDs and forex unlawfully to Belgian citizens.

In addition, Rodeler is required to make contact with all of its Belgian customers to offer them the possibility to terminate their contracts and be reimbursed their current account balance.

Owned by Israelis, Rodeler calls clients from its call center in Israel under the company name Betamedia. While the FSMA did not wish to speak on the record about the Israeli connection to binary options and forex fraud at this stage, Shmuel Hauser, Chairman of the Israel Securities Authority, told The Times of Israel in an interview last week that the ISA has been approached by the Belgian regulatory authorities in the past year about binary options firms operating from Israeli territory.

There are more than brands operating from Israel, employing thousands of Israelis, defrauding customers out of an estimated billions of dollars per year. While local binary options firms have now been banned by the Israel Securities Authority from targeting Israelis, they are still free to target people abroad. In the past year, the FSMA has issued warnings about other binary options companies that operate from Israel, including CentralOption, PWRTrade, Tradesolid, and RBoptions.

We also refer victims to Cysec and the financial ombudsman in Cyprus. I joined The Times of Israel after many years covering US and Israeli politics for Hebrew news outlets. I believe responsible coverage of Israeli politicians means presenting a degree view of their words and deeds — not only conveying what occurs, but also what that means in the broader context of Israeli society and the region.

I believe Israel is stronger and more democratic when professional journalists do that tough job well. Your support for our work by joining The Times of Israel Community helps ensure we can continue to do so. So now we have a request. But as the journalism we do is costly, we invite readers for whom The Times of Israel has become important to help support our work by joining The Times of Israel Community.

The City Hall and the center of the old town in Brussels, Belgium on December 9, Jean-Pol GRANDMONT, CC-BY Wikimedia commons. Get The Times of Israel's Daily Edition by email and never miss our top stories. Newsletter email address Get it By signing up, you agree to the terms. Johan Van Overtveldt Courtesy. Thank you, Tal Schneider, Political Correspondent. Thank you, David Horovitz, Founding Editor of The Times of Israel. Most Popular. Orthodox parties demand legalization of gender-segregated public events.

close popup. Sign in or Register. Or Continue with By registering you agree to the terms and conditions. Send me The Times of Israel Daily Edition. Register to continue. Or Continue with. Log in to continue. Please try again in a few minutes.. Please try again or choose an option below.

We sent an email to you at. Click the link in that email to complete registration so you can comment. Stay updated.

A minority of the victims of these fraudulent companies are native Israelis. I joined The Times of Israel after many years covering US and Israeli politics for Hebrew news outlets. Please try again or choose an option below. Newsletter email address Get it By signing up, you agree to the terms. The ban became law on August 8 and will go into effect on August Defeating binary options shows the system can work.

Categories:

• Forex Brokers
• Forex
• Binary Options online
• Forex Bitcoin
• Binary Options