Comment by Animats | Hacker News Reader

Comment by Animats | Hacker News Reader

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The "binary options" scam industry, which is mostly run from a suburb of Tel Aviv, has been targeting the Arab world recently. Mostly by default. The industry isn't allowed to scam Israelis, but the rest of the world's suckers are fair game under Israel law. They've been kicked out of the US, and recently, most of the EU. So they're telemarketing into the Arab countries now.

This requires hiring Arabic speakers, who are available in Israel. Greed apparently overrides Arab-Israeli differences in this area.

(Big 15-part expose in the Times of Israel: "The Wolves of Tel Aviv".[1] Summary: binary options are bets against the house, not against other speculators. Binary options "brokers" are not really brokers, they're shills for the house. Worse, the house cheats, tweaking the prices to make customers lose. Even if customers win, the house won't pay up. 80% of investors lose all their money. This brings in over 0.7% of Israel's GDP, and that's just the part that pays taxes.)

[1] http://www.timesofisrael.com/the-wolves-of-tel-aviv-israels-...

As an Israeli gaming pm I think this niche as well as other gambling related activities like affiliates are a product of a lack of "resources". too many want web businesses, and too few get funding or help. It's easy to re skin gambling solutions and get started with a working business and the mission to convert as many leads as possible. Most of these "businesses" are tiny (4-6 workers) and are not yet at the point where morality beats "let's put food on the table and grow the business guys!"

I only skimmed the article, but couldn't find the reference to binary options companies. Can you please share where is the section that is related to it in the article?

The headline: "The wolves of Tel Aviv: Israel’s vast, amoral binary options scam exposed" of [1]. It's an example of Israel tech firms doing business in the Arab world, quietly.

[1] http://www.timesofisrael.com/the-wolves-of-tel-aviv-israels-...

Forgive my confusion, I'm asking about the op article, titled: "How Do Israel’s Tech Firms Do Business in Saudi Arabia? Very Quietly" I didn't find a link to the wolves of Tel Aviv article there or any mention of it. Is it directly related to the op article or just a generally related case of an Israeli / Arab Tech related business? It seems in first look at your comment (without reading the op post) that this is the op's main topic. The op post talk about Cyber Security and other more relatively positive engagement. It's good in any case to see other aspects to the same story so thanks for sharing

The connection is that the binary options stuff has basically been mostly booted from the EU/US and is now targetting Arab countries, and is a prime example of Israelis quietly doing business with Saudis

Interestingly, Wikipedia claims it's not banned in the US.

https://en.m.wikipedia.org/wiki/Binary_option

> In the U.S., the Securities and Exchange Commission approved exchange-traded binary options in 2008. Trading commenced on the American Stock Exchange and the Chicago Board Options Exchange (CBOE) in May and June, 2008.

Also it seems that in Israel they are working on banning marketing it overseas

> In Israel, where a high concentration of such firms can be found, binary options trading was prohibited for Israeli customers in March 2016, on the grounds that it is a form of gambling and not a legitimate investment technique. A ban on marketing of binary options to overseas customers is under consideration.

Binary options per se are not banned in America, but you have to have proper regulatory approval. The companies running binary options gambling operations wouldn't be able to meet the approval requirements, because usually those companies don't actually match buyers and sellers directly, so they manipulate the prices more like a bookmaking operation than a financial market.

There is a market that is regulated by the Commodity Futures Trading Commission that only has binary options, but they don't take positions in their own market and meet other regulatory requirements. They even offer binary options on events (Fed funds rate movement, for example) so it acts as a prediction market of sorts. Whether it actually provides a net benefit to the world aside from gambling is very much in question though. I find it hard to believe that people are using their binary options for hedging.

I'm looking forward to reading this, but my first impression is that calling a scam "amoral" is bizarre.

I wouldn't take the word "amoral" in the title too seriously. This website has been working very hard (and somewhat successfully, I think) to take down the industry over the last few months. And the subtitle of the report is:

"An industry turning over hundreds of millions of dollars, employing thousands of people, is cynically cheating naive would-be investors worldwide via a range of corrupt practices. It is doing terrible harm to its victims, and it risks doing the same to Israel’s reputation"

I don't think they're particularly ambivalent about this industry being a bad thing.

"Amoral" is used by sociopaths to justify their immoral behavior; "morality doesn't apply to me".

Greed can be found to "overrides differences" in every area.

> This requires hiring Arabic speakers, who are available in Israel.

There are more than 2 million people who speak Arabic in Israel.

Yes, I think that's what the parent was saying.

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