The analogy between binary options and gambling led the Israeli Parliament to adopt ever stricter laws to eradicate the Forex scam phenomenon in the Country, although this means prohibiting the whole online investments.
Unfortunately, Israel has become the home of gambling and online investments. Such a situation can be explained by the success of the Israeli software companies which, starting from military demands, have been able to develop sophisticated programs for processing large volumes of data. Firstly, it dealt with gaming platforms including integrated systems which allowed secure transactions; however, the shift from games to gambling and Forex has given rise to a phenomenon able to move millions of dollars.
The management of such a "toy" has resulted in the development of numerous activities related to betting and trading, most of which are unequivocally aimed at defrauding investors. The investments proposed to customers will often result in the total loss of the sums invested. Multilingual call-centre services, employing people from all over the world, have been implemented with the sole aim of attracting customers towards dangerous and fraudulent sites.
Consumers made their voices heard
When savers' complaints begun to be pressing, reaching astonishing numbers and figures, the ISA (Israel Securities Authority), designated to supervise financial markets and savings instruments – the corresponding watchdog in Italy is Consob – took the situation into its hands by asking the Israeli Government to legislate on this matter and close fraudulent companies. In the summer of 2014, the Israeli Parliament ratified the first set of rules regulating the financial trading sector which first imposed the Israeli brokers to acquire a license to operate.
Then, it would be ISA's task to evaluate the suitable companies and, subsequently, to control them in order to protect consumers from transferring money to scam companies. Through bi-weekly and monthly reports on their activities, traders would have been aware of their investments' fate and, most importantly, according to the new rules, they should have been instructed on the product purchased.
The maximum leverage was set at 5% for high-risk financial products, 2.5% for medium-risk products and 1% for low-risk financial products. Then, the separation between the money invested by customers and the company's capital was of fundamental importance.
The next step of the Israeli authorities was to prohibit...