The analogy between binary options and gambling led the
Israeli Parliament to adopt ever stricter laws to eradicate the
Forex scam phenomenon in the Country, although this means
prohibiting the whole online investments.
Unfortunately, Israel has become the
home of gambling and online
investments. Such a situation can be explained by the
success of the Israeli softwarecompanies which, starting from military demands,
have been able to develop sophisticated programs for processing
large volumes of data. Firstly, it dealt with gaming platforms
including integrated systems which allowed secure transactions;
however, the shift from games to gambling and
Forex has given rise to a phenomenon able to move
millions of dollars.
The management of such a "toy" has
resulted in the development of numerous activities related to
betting and trading, most of which are
unequivocally aimed at defrauding investors. The
investments proposed to customers will often result in the total
loss of the sums invested. Multilingual
call-centre services, employing people from all over the world,
have been implemented with the sole aim of attracting customers
towards dangerous and fraudulent sites.
Consumers made their voices heard
When savers' complaints begun to be pressing, reaching
astonishing numbers and figures, the ISA (Israel Securities
Authority), designated to supervise financial markets and
savings instruments – the corresponding watchdog in Italy is
Consob – took the situation into its hands by asking the
Israeli Government to legislate on this matter and close fraudulent
companies. In the summer of 2014, the Israeli Parliament ratified
the first set of rules regulating the financial trading sector
which first imposed the Israeli brokers to acquire a license to
Then, it would be ISA's task to evaluate
the suitable companies and, subsequently, to control them in order
to protect consumers from transferring money to scam companies.
Through bi-weekly and monthly reports on their activities, traders
would have been aware of their investments' fate and, most
importantly, according to the new rules, they should have been
instructed on the product purchased.
The maximum leverage was set at 5% for
high-risk financial products, 2.5% for medium-risk
products and 1% for low-risk financial products.
Then, the separation between the money invested by customers and
the company's capital was of fundamental importance.
The next step of the Israeli authorities was to prohibit
online trading or binary options sites from providing their
services to customers residing in Israel by equating the
binary options, as speculative products, to
gambling, already banned in the Country. Obviously, the prohibition
from operating within their national borders has not stopped the
online transaction companies which have began to look for customers
abroad. When the United States realized what was going on (thanks
to the testimonies of consumers who were already cheated) they
asked, and obtained, that the ban was also extended to US
Further obligations for brokers
In May 2015, the Israeli Government, along with US citizens
protection, introduced a number of other obligations for
online forex trading or binary options companies,
including the preparation of countermeasures to be taken in case of
legal actions from customers, hacker attacks, IT-related problems,
errors or offences committed by employees. Brokers have been also
prohibited from attracting customers through bonuses; furthermore
the Government set a limit to advertising and marketing actions to
be solely disclosed after receiving ISA's approval.
And there's more....
In order to protect the reputation of the Israeli financial
system, which has been seriously undermined by continuous scandals,
ISA asked that prohibition was not limited to the sole customers
involved, but rather that the online sites were previously
prevented from causing any damage to third parties.
The idea is to make the whole binary options
industry illegal throughout the Country. Indeed, some proposals are
going to be added to an already existing Draft Law in order to give
precise guidelines for the management of transactions in Israel
with the aim of protecting also foreign customers. This will stop
the phenomenon of Israeli scams and restore Country's
Very hard times are coming for Israeli online trading
; however, the consequences of such severe rules could drive the
"shot down" companies towards more permissive Countries,
such as Italy.
Anyway, call-centres keep on defrauding thousands of people
, disregarding the law, given that ISA is not entitled to
If you have been involved in a Forex or binary options related
scam, or suspect that your broker is acting in a haphazard manner,
do not hesitate to contact our experienced lawyers.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The philosophy behind the removal is to enable ISPs to bring down their internet data price as low as possible so as to gain more subscribers as well as make it cheaper for Nigerians to access the internet.
The deregulation of the telecommunications sector in 2001 led to the issuance of telecom licenses to major telecom providers.
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