Binary options involve betting on whether financial assets, such as shares, commodities, currencies or other securities will go up or down in value in a specific time period. The time for the option to ‘mature’ is short, it can be as little as a minute. The winning bets only pay a fixed return, and cannot be re-sold. Whilst binary options are marketed as legitimate investments, they are considered akin to gambling and in reality they are often scams. The industry involves huge sums of money, in multiple continents.
All Israeli binary options firms are now banned by the Israel Securities Authority from targeting Israelis, but the firms remain at liberty to solicit customers abroad. The Times of Israel has estimated that there are over 100 companies involved in the industry in Israel. Whilst not all companies that offer binary options are fraudulent, many that state to be introducing their customers to lucrative investments are using misrepresentation and other allegedly disreputable practices. Large numbers of customers end up losing all, or practically all, of their money. They then have the difficulty of attempting to trace the company they gave their money to, not realising that although they may have been told it was registered in the United Kingdom, for example, in fact it will have been operating from Israel.
Many binary options firms operating globally are completely unregulated. In August 2016 Belgium’s regulator FSMA became the first European country to ban the advertising and marketing, and offering of forex products, binary options and some CFDs (contract for difference). This resulted in a total ban on leveraged financial products trading in Belgium for retail traders. France’s financial regulator AMF has banned all advertising of forex products, binary options and some CFDs. The United States has outlawed binary options trading on an OTC (over-the-counter) basis as well as any firm that provides this from operating in their jurisdiction.
The forex market is open 24 hours a day and is where the world’s currencies are traded. There is no centralised market for the trading of currencies and forex trading can be very risky. It is a legitimate trading market and not a scam itself, however it is a high leverage market and it can be unpredictable with frequent price fluctuations, presenting the opportunity to make institutions, companies, and individuals a lot of money. As a result there are many companies that take advantage of this situation.
The Knesset State Control Committee met on Monday 2 January 2017 to consider how Israel’s law enforcement bodies could join forces to tackle Israel’s fraudulent binary options industry, following internal and external criticism for the failure to properly tackle this industry.
Investors should understand the risks associated with binary option and forex trading, and that there are an increasing number of financial scams being perpetrated by brokers to misappropriate their money.
The Times of Israel has produced a series of articles exposing Israel’s fraudulent binary options industry (http://www.timesofisrael.com/topic/binary-options/)
If you have found yourself to be a victim of binary options and related fraud, call us and we will go through the options of recovery with you. Birman Law has significant experience in tracking down the location and real identity of binary options companies, many of whom use fictitious addresses and names. Birman Law fights on behalf of their clients fearlessly and strives to obtain as much of your money back as possible as well as holding those responsible to account. We recognise that financial fraud places clients under emotional and financial stress and we look to provide you with a helping hand through this trying time.