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Israel top cop admits organized crime behind binary options, Knesset to pass bill next week

Aug 08 2017
By
Jonathan Smith

 Israeli crime syndicates have been profiting from the binary options scams, Gabi Biton, a police Superintendent investigating financial fraud and money laundering told a Knesset panel, quoted by The Times of Israel.


In his speech the senior police officer admitted the authorities have failed for a long time to realize that the binary options industry was a scam and that behind it were standing organized criminal groups who profiteered from it.


“Our eyes have been opened,” Biton told the Israeli MPs. “What we’re seeing here is a massive organized criminal enterprise. We are talking about criminals at various levels of crime organizations, up to the very top.” According to Biton, the “lucrative scam” of binary options attracted established organized criminal groups who saw the huge economic potential and their bosses hired professionals, foreign language speakers and payments options to help them carry out the fraud. “It has grown to monstrous proportions,” Biton added. “I can say that we are discovering new paths of money laundering through this crime that we were not aware of.”


Biton was speaking at a Knesset panel discussing the draft bill banning the offering of binary options to clients abroad and accepting foreign clients by Israeli brokers. The bill is due to be passed by the Knesset next Monday, local media report.


According to The Times of Israel, however, the final version of the bill is “watered down” and the original draft prepared by the local regulator, the Israel Securities Authority (ISA), has been weakened. To be more precise, the original was stipulating that online brokers Israel and targeting customers abroad must do so with a license from the country where they operate. This included both binary options and other financial instruments like forex and CFDs. The final version, however, has only kept the binary options ban and has left out the other instruments.


As per the media reports, this means that the binary options brokers who are currently in hot water, would simply change their business model and start offering other types of financial products. We are already seeing this with major binary options brokers with Cyprus licenses, but in practice operating from Israeli call centers who are remodeling. In July 24option said  it stops accepting new binary options clients and will start offering trading in forex and CFD instruments. A few days earlier  anyoption – announced it will merge with Invest.com and will focus on the offering of forex and CFDs. Earlier this year one of the majors - Banc De Binary shut down its operations altogether.


The Israeli binary options industry has been operating undisturbed for years, allegedly defrauding thousands of gullible people out of millions. According to various estimates, the around 100 companies generated an annual turnover of between $5-10 billion and employed thousands of people, mostly in their call centers.

 

 

TAGS: binary options  israel  ban  fraud  scam 
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