The Truth Behind Binary Options Fraud in Israel

by Pinky Tyagi Blogger & Writter

online scam

Tel Aviv, in the center of Israel has come under much scrutiny recently as it is fast becoming recognized as home to the fraudulent and unregulated binary options industry – an industry fleecing helpless victims through rigged trading platforms and the refusal for client withdrawal.

Binary options is potentially one of the biggest and most sophisticated scams in the history of Israel’s economy, with an estimated 95% of binary options companies residing in Israel.

Quick Facts about Israel’s Binary Options Fraud

In the past decade, the country has witnessed a huge increase in binary options trading scams. The binary options scam has stolen billions of dollars from unexpecting victims who have invested in these trading platforms. Financial experts and politicians are now waking up and bringing this issue to light.
Israel recently passed a law ultimately banning all binary options from operating out of Israel, giving the industry three months to wind down operations. After that, any individual involved in binary options faces up to two years in jail.
This multi-billion-dollar fraudulent industry is estimated to be worth around 5-10 billion USD per year, with fraudsters promising lucrative short-term investments, only to defraud their clients through manipulated trading platforms and confusing terms and conditions. It is understood that these binary options scam artists are now closing their operations in Israel only to expand and move to countries with little to no regulation, such as Bulgaria and Ukraine.
Binary options brokers specialize in convincing clients to deposit money in exchange for high returns, promising upto 60% return on your investiment. In an ideal world, this would be a fantastic investment prospect, but in the binary options world, this is simply a dream.
The trading platforms are allegedly rigged to ensure that the only parties profiting are the binary options company and the scam broker. Initially, traders are led to believe that they are making money from their ‘winning trades’, when in actual fact, this is all a façade created to encourage them to deposit more money.
Platform providers supply the binary options industry with the technology that allows clients to trade. These platform providers can charge up to 50% revenue share to each binary options company, thus providing further incentive for clients to lose trades. This was really brought to light with the recent arrest of a binary options CEO at JFK airport in New York. The Federal Bureau of Investigation (FBI) indictment stated that both the binary options brand and the platform providers were caught corresponding which each other to ensure clients placed losing trades.
Victims from all over the world have lost huge sums of money, with some even resorting to suicide.
Countries such as the UK, Australia, Canada and others have enforced strict laws banning both binary options trading with their citizens and binary options advertising.

Due to the highly fraudulent nature of the binary options industry in Israel, recovery companies specializing in recouping victim’s money are taking action and stepping in where the authorities will not.