Binary Options Industry Banned
The binary options industry has been generating huge amounts of money, employing thousands of people, and cheating investors worldwide with many different scams. It has been doing terrible harm to its victims. The center of this scam has been Israel. Finally, the government of Israel has taken action.
The Knesset on October 23, 2017 unanimously passed a law to ban Israel’s binary options industry. The law, will go into effect three months from October 23, 2017. This law gives all binary options firms three months to cease operations. After that, anyone involved in binary options is punishable with up to two years in jail. – Source timesofisrael.com
A binary option is a type of options contract in which the payout will depend entirely on the outcome of a yes/no proposition.
The yes/no proposition typically relates to whether the price of a particular asset that underlies the binary option will rise above or fall below a specified amount. For example, the yes/no proposition connected to the binary option might be something as straightforward as whether the stock price of XYZ company will be above $9.36 per share at 2:30 pm on a particular day, or whether the price of silver will be above $33.40 per ounce at 11:17 am on a particular day. Once the option holder acquires a binary option, there is no further decision for the holder to make as to whether or not to exercise the binary option because binary options exercise automatically. Unlike other types of options, a binary option does not give the holder the right to purchase or sell the underlying asset. When the binary option expires, the option holder will receive either a pre-determined amount of cash or nothing at all. Given the all-or-nothing payout structure, binary options are sometimes referred to as “all-or-nothing options” or “fixed-return options.”
These companies based in Israel would commonly register as a private limited company in the UK to hide the actual location of the business. Then they would go about cheating people out of their money worldwide.
Here are three ways these companies would scam people:
1. They refuse to credit your account or reimburse funds after accepting your money. You deposit money into your binary options trading account and are then encouraged by “brokers” over the telephone to deposit additional funds into your account. When you attempt to withdraw your original deposit or the return you have been promised, they cancel your withdrawal request, refuse to credit your account, or ignore your telephone calls and emails.
2. They collect information such as credit card and driver’s license data for identity theft purposes. If a binary options Internet-based trading platform requests photocopies of your credit card, driver’s license, or other personal data, do not provide the information.
3. They manipulate the binary options trading software to generate losing trades. The Internet-based binary options trading platform manipulates the trading software to distort binary options prices and payouts. For example, when a trade is “winning,” the countdown to expiration is extended arbitrarily until the trade becomes a loss.
– Source Cftc.gov
Binary Options Industry Ban Conclusion
This binary options ban in Israel is a good step in the right direction. There is a problem with this law, it does not ban these companies from running the same scam with FOREX. You can now expect these companies to move more into FOREX, diamond sales, cryptocurrencies, and fake ICOs. Also, they may just move to Cyprus to avoid the law. More work needs to be done to end the binary options scam.