Moshe Kachlon, the Minister of Finance of Israel will be presenting an amendment to the current securities law on Sunday, June 18, 2017. There were several governmental bodies that worked on this proposition, namely; Ministry of Finance, the Israeli Securities Authority (ISA), and the consultation and legislation department in the Ministry of Law.
What happens to binary options in Israel if this long-awaited law passes? Israeli binary options firms will be forbidden from offering their services to clients that are not in the country of Israel. However, this does not mean that they will be able to sign on new clients that do live in Israel. If we recall, the Israeli Securities Authority (ISA) banned binary options within the borders of Israel about a year ago, drawing a parallel to gambling.
Up until this soon-to-be-passed law, binary options brokerages could legally operate and offer their services to traders that live outside of Israel and could have done so without any regulation or authorization from the leading authorities. However, ISA had received a vast amount of complaints from across the world, mostly referring to financial losses they experienced when dealing with these unregulated binary options companies.
The ISA is very concerned about the negative effect that this has made on the people who lost their money in a scamming operation but also on the overall image of the country and especially its financial market events. It seems that, after this law is passed, if any person or company violates the law, it will be considered as money laundering and the penalties will be severe. The sanctions are to be various including a year-long prison sentence.
If we recall a recent comparison made by the professor Shmuel Hauser, the Head of the Israeli Securities Authority (ISA) where he stated that binary options industry is comparable to blood diamonds, we can start to realize how serious the situation actually is. This comparison was made on the account of many previous and current trading clients who have lost significant amounts of money by falling victims to scams perpetrated by some of the brokerages in this industry.