You consider yourself a good Muslim who would never gamble, or deal with interest, which every Muslim knows is haram, or forbidden. But, you also want to make money fast. Well, you’re in luck, or at least a number of Israeli companies would like you to believe you are.
Marketers for binary options firms — some of them based in Israel or run by Israelis — are targeting Muslims, especially wealthy citizens from the Gulf, through websites that assert that the use of their trading platforms is permissible according to Islamic law.
One such prominent website is halalbinaryoptions.com, which appears in both Arabic and English.
“My dear Islamic brothers, we are people born for trading since the ancient times – we have trading in our life blood and we are very good in it,” the website reads, before explaining how a good Muslim can trade in binary options and detailing where to find the best Islamic accounts.
Your binary options trading is acceptable, or halal, if “you take an online broker that offers an Islamic account type like from 24option… they offer the best Islamic accounts, are reliable and very secure,” it adds.
Then a sentence with a hyperlink to 24option.com, a large binary firm, appears: “If you trade like this, it is okay with our religion and you can go trading now!”
The halalbinaryoptions.com also tries to persuade potential clients that trading in binary options is halal if they trade with self-control and never trade to compensate losses from former trades, trade with a clear strategy after observing the market and/or economic indicators, and don’t trade to compensate losses.
The Times of Israel has in recent months been detailing massive fraud by Israeli binary options firms, beginning in March with an article entitled “The Wolves of Tel Aviv.” The fraudulent firms purport to be guiding their customers in making lucrative short-term investments, but are in fact using various ruses, including misrepresentation, allegedly manipulating rigged trading platforms and outright refusal to return deposits, to steal their clients’ money.
According to Israeli regulators, even if most binary options brokers were not engaged in outright fraud, they would not be halal because in the best case scenario such short-term trades are a form of gambling.
All local binary options firms are now banned by the Israel Securities Authority from targeting Israelis, but the firms remain free to target people abroad. The US has banned overseas binary options firms from targeting its citizens, and numerous countries, including the US, Canada and France, are investigating Israel-based binary options fraud on behalf of their citizens who have been cheated. Belgium last week became the first European country to ban the industry, in a move that takes formal effect on Thursday, August 18.
The head of the Israel Securities Authority, Shmuel Hauser, told The Times of Israel last week that the global scam perpetrated by Israel-based firms is doing immense harm to Israel’s reputation and promised to tackle the fraudulent industry. Branding the binary options industry in Israel “repugnant,” “immoral” and profoundly damaging to the country, Natan Sharansky on Monday urged Israeli regulators to do everything in their power to close it down.
Recently, the Autorité des Marchés Financiers (AMF), France’s securities authority, banned 24option from operating in France for failing to act honestly; 24option is owned by Israelis and has a large call center in Ramat Gan.
The halalbinaryoptions.com site is full of hyperlinks, not just to 24option.com but also to another large firm — Banc De Binary — which also purports to offer Islamic trading accounts.
In March, Banc De Binary was ordered by a US federal court to hand over more than $11 million in payback and fines for breaching regulations and misleading clients. Banc De Binary is owned by Israelis and operates a large call center in Israel while being regulated in Cyprus.
The halalbinaryoptions.com website — like many others that advertise Islamic binary options — is made by a third-party “affiliate,” who lures traffic for binary options brokers, often in exchange for a commission.
While affiliates do have a certain level of creative freedom in their marketing strategies, an insider source told The Times of Israel that in most binary brokerages the CEO will vet the content of prominent marketing campaigns.
The Israeli binary options industry is neither exclusively Jewish nor Arab. It employs a large number of Israeli Arabs, and uses affiliates located in the Arab world. There are also a number of exclusively Arab-owned brokerages based in Israel.
The sales pitch
Islamic binary options firms purport to allow for trading without the basic well-known hurdles: gambling and dealing with interest, both of which are forbidden in Islam.
However, the words “interest” or “gambling” are meaningless in the case of binary options, according to a former Arab-Muslim worker in the field who spoke to The Times of Israel under the condition of anonymity.
When asked if interest could have anything to do with the majority of binary options firms, he responded: “There could be anything they want. It’s not a real type of investment. They can put whatever they want. But they say ‘no interest’ to make it sound Islamic.”
“It’s a fraud that’s masked as gambling that’s masked as actual trading,” he added. “And quite frankly, as a Muslim, I find the tone of the website very condescending and it paints Muslims as simpletons.”
Does The Times of Israel give you valuable insight into Israel and the Jewish world? If so, please join The Times of Israel Community. For as little as $6/month, you will:
We’re really pleased that you’ve read X Times of Israel articles in the past month.
That’s why we come to work every day - to provide discerning readers like you with must-read coverage of Israel and the Jewish world.
So now we have a request. Unlike other news outlets, we haven’t put up a paywall. But as the journalism we do is costly, we invite readers for whom The Times of Israel has become important to help support our work by joining The Times of Israel Community.
For as little as $6 a month you can help support our quality journalism while enjoying The Times of Israel AD-FREE, as well as accessing exclusive content available only to Times of Israel Community members.