An interesting development in the Israeli binary options industry was uncovered today. Fairtrade, a recently launched peer-to-peer (P2P) binary options trading platform, is resisting the Israeli Securities Authority’s attempt to shut it down. This is in stark contrast to other providers that decided to close up shop rather than make a case for their business (most notably Banc De Binary).
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Earlier this month the ISA issued a warning against Fairtrade, after informing it that it was breaking the law, and demanding that it halt its activities within 7 days.
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Fairtrade has appealed to the courts to stop the closure demand, saying that the decision is unconstitutional, based on false legal infrastructure and is against current rulings, according to The Marker. The main argument of Fairtrade is that binary options is not securities, and therefore the firm is not operating an unauthorized exchange as the ISA claims.
Tomorrow morning the case will be brought before the court in Tel Aviv and a temporary injunction order has been issued until a further decision is made.
The co-founders and co-CEOs of Fairtrade are accountant Avi Gal and lawyer Yaniv Genzer. In December they explained the model to Finance Magnates, claiming their activities are in accordance with Israeli law: “We offer a system of trade between people and don’t need a license in Israel as its P2P. The ISA is familiar with our activity and we operate according to a legal framework. The website operates only in Israel and is meant for Israelis only. The vision is to implement the P2P model at the expanse of the traditional broker model, on all finance products.”