A major milestone has been reached today, with the approval of an amendment to the securities law by a ministerial legislative committee of the Israeli government. The amendment will ban the marketing of binary options to foreign citizens by Israeli providers.
If the new law is passed, binary options providers will be prohibited from doing business with foreign citizens. It states that the marketing of this product will fall under money laundering legislation “in light of the fraudulent nature that might accompany this industry.”
It still remains for the new law to pass its first, second and third reading in the Israeli parliament. Binary options operations within Israel were banned by the Israeli Securities Authority (ISA) about a year ago, as the regulatory body’s stance on the matter equates this type of online trading to gambling.
The governmental bodies that have been working on the proposition are the Ministry of Finance, the government’s legal advisor, the ISA, and the consultation and legislation department in the Ministry of Law.
Up until now, binary options firms dealing with clients living outside of Israel have been able to operate legally, without requiring any sort of authorization or regulation. Recently the ISA, among other local authorities, received numerous complaints regarding the financial losses of clients from countries around the world who have traded with Israeli companies. A large number of these companies were offering binary options trading.
The ISA Head, Prof, Shmuel Hauser commented: “On top of the severe financial damage binary options providers cause to foreign citizens, they are continue to damage Israel’s international image and instigating anti-Semitism towards Jewish people in general and Israelis in particular. The new law will allow the ISA to act against those factors which on-board foreign citizens in an unprecedented manner which includes the imposing of civil and criminal sanctions and even imprisonment.”
An open war
The ISA declared open war on the binary options industry over a year ago. Its first dramatic step was to ban the offering of binary options to Israeli citizens back in March 2016. Last year at the same conference, Prof. Hauser made some extreme remarks against binary options, saying that it is a fraudulent industry that “burns the money of orphans, widows and pensioners”.
The moves against the Israeli binary options industry have taken their toll on both brokers and technology providers over the past year. The last six months alone saw the complete closure of Banc De Binary, the closure of the local call centers of 24Options and Anyoption, and dozens of unregulated binary option providers shutting down their businesses.