The Binary Options industry was officially banned in Israel on Monday, after a new law was unanimously passed by the parliament. The law will come in effect after a period of three months, within which all Binary Options brokers and firms must cease operations. Israel becomes the third country to completely ban the industry after Belgium and Canada. Severe restrictions regarding Binary also apply in the US and France.
The importance of this legislation relies on the fact that the Binary Options industry was born and raised in Israel, and was allowed to flourish uniterrupted from 2007 until recently. During the summer of 2016, the Israel Securities Authority was finally alerted to the fraud by local press and eventually proceeded to take action to protect investors. The law however, is only a constrained version of the introduced draft, which would have the Forex and CFD Brokers that operate from Israel without a license to be banned altogether.
At it's peak, Binary Options was estimated to bring to the scammers 5 to 10 billion US dollars per year. Unauthorized deposits, refusal of withdrawals, rigged trading platforms, fake promises of fast profits and the use of psychological abuse over the phone have been the most common methods used by Binary Brokers to extort money from investors. Regulators including the SEC in the US and ASIC in Australia, as well as various Consumer Protection Authorities around the globe have issued several warnings against unauthorized Binary Options firms in the past five years. However, only a small number of individuals was arrested so far and none has been convicted.
In the wake of MiFID II early next year, EU Regulators are expected to attempt to enforce more firm control on Binary Options trading. The question that arises however, is how does one effectively regulate a product that is inherently prone to fraud.
Potential investors most commonly end up trying Binary Options when looking for a simpler approach to trading than Forex. Top Forex Rebates would like to point out that education is the only valid path that could lead to success in the online trading world.