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Israel Becoming ‘World Bitcoin Fraud Center’

 
 
 
 
 
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Israel is rapidly becoming the world bitcoin fraud center as the now-outlawed “binary options” swindlers in that country move into the crypto-currency field, a report in the Jewish Telegraphic Agency news service has announced.

The article, titled “Bitcoin fraud could be the next big thing for swindlers in Israel,” says that “Israel is shaping up to be a hub for cryptocurrency swindling.”

It “has happened before,” the article continues, explaining how over the previous decade more than 100 “binary options” companies set up shop in Israel, “forming the core of a global industry” which swindled online investors out of billions.

The “binary options” scam was illegal in Israel—that is, Israeli law forbid the selling of the scam to Jews inside Israel—but was not illegal to be sold to unsuspecting gentiles outside of Israel.

The binary options “industry” was eventually outlawed completely—but not on moral grounds, but rather because it was “causing anti-Semitisim.”

Shortly after the “binary options” swindle was outlawed, the JTA article continued, Israel Securities Authority Chairman Shmuel Hausner was quoted as saying that he was “very troubled” by the possibility that binary options cheats would turn cryptocurrencies into the next big scam.

The JTA article continued:

Austin Smith, the founder of Wealth Recovery International, a Tel Aviv startup that helps victims of binary options fraud reclaim their money, warned that the worst fears of the authorities are coming to pass.

He said the same factors that earn Israel the “startup nation” moniker also make it a breeding ground for fraudsters: its small size, innovation and technology, seize-the-day mentality and diverse immigrant population that can market in myriad languages.

Based on his company’s investigations, which have included sending moles into the offices of scammers, Smith has concluded that Israel is seeing an industrywide shift into cryptocurrency.

“More or less every binary options company we know of now has a cryptocurrency platform as well,” he said. “I’m already getting calls from victims, but most people have yet to even realize they’ve been defrauded.”

Smith said the cryptocurrency scams involve not only securities, but also initial coin offerings and futures. In each case, the fraudsters offer a bogus product in exchange for cryptocurrency and simply pocket much or all of the investment. Conveniently for criminals, who were among the first adopters of the technology, cryptocurrency’s encryption and decentralized control system makes it nearly impossible to track.

Arthur VanDesande, a consultant for the Wolf Global consultancy who recently retired as a U.S. Internal Revenue Service special agent focused on international fraud, also predicted that Israeli binary options swindlers would spearhead a massive new cryptocurrency fraud akin to the binary options scam.

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