The Knesset. Photo: Itzik Edri via Wikimedia Commons.

JNS.org – Israel’s Knesset unanimously voted to ban the country’s multibillion-dollar binary options industry this week, paving the way for regulators to crack down on online trading companies that have defrauded millions of people worldwide.

The law, which will come into effect in three months, passed despite intense lobbying by binary options companies to frame the fraudulent industry as being a key contributor to Israel’s hi-tech sector.

At the end of the three-month period following the law’s passing, individuals or businesses caught dealing in binary options risk being charged with a maximum sentence of two years in prison.

“We worry about the BDS movement,” said Knesset member Rachel Azaria (Kulanu) when introducing the new law in the Knesset. “This industry has a huge impact on how Israel is viewed throughout the world. Our government officials go to international conferences and their colleagues abroad raise their eyebrows because of this industry.”

Although binary options companies have thrived in Israel for a decade, less than 20 Israeli citizens affiliated with the industry have been detained on charges of fraud, with none being indicted. Binary options firms in Israel had generated an estimated $5 billion-$10 billion in annual revenue.

In August, Israel Police Superintendent Gabi Biton said the heads of organized criminal gangs in Israel were behind the fraudulent industry.