The Knesset Reforms Committee voted 4-0 on Monday in favor of legislation to ban the entire, widely fraudulent binary options industry from operating anywhere in the world from Israeli soil.

But with the bill now required to make its way to the Knesset plenary for second and third votes to become law — it passed its first Knesset vote 31-0 in June — the coalition chairman David Bitan (Likud), who opposes some of its provisions, is vowing not to bring it to a vote in the near future. “Why is this so urgent?” he told fellow MKs on the panel, having arrived too late to its session Monday to try to change the terms of the bill. “It can wait.”

Were the bill to become law, operators of binary options sites would have three months to cease all activity or face up to two years in prison.

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Following the committee vote Monday, Bitan arrived at the session and sought to reopen the debate, but was told he had missed the opportunity. Chairwoman Rachel Azaria (Kulanu) then urged Bitan to bring the bill for approval by the Knesset as soon as possible, but he said he had no intention of doing so.

The bill has already been watered down from the original draft published in February — which in addition to a wholesale ban of binary options would have required forex and CFD companies operating from Israel to obtain licenses in the countries where they operate.

Sources close to the legislation told The Times of Israel that the bill in its current form would likely gain final Knesset approval if brought to a vote. But they noted that Bitan’s stance could prove critical, since, as coalition chairman, he has the power to decide which proposed laws come before the Knesset plenary and can delay the passage of bills indefinitely if he so chooses.

Bitan arrived shortly after Monday’s committee session, after the vote had been taken, after Azaria had declared the meeting over and as the room was mostly cleared out. A Likud power broker who sits on the Reforms Committee but had not attended any of the committee’s discussions, Bitan asked to make changes to the law that would allow SpotOption and other binary options platform providers to continue to operate from Israel.

Bitan was told by Azaria that it was too late, and that the bill had been voted through. Fellow committee member Haim Jelin (Yesh Atid) chimed in that the law could not now be re-opened.

Bitan then declared that that he would not convene the Knesset plenary to vote on the proposed law in the near future, and said he did not think passage of the binary options ban was “urgent.”

In a semi-private conversation that was overheard by many of those who remained in the room after the committee meeting, MK Azaria pleaded with Bitan to convene the plenary right away to pass the bill despite the fact that the Knesset is currently in summer recess. “This law is very important,” she urged. “Binary options is causing anti-Semitism around the world.”

Soon after Azaria said this, a Knesset usher asked reporters to leave the room. But a source who remained told The Times of Israel that Bitan told Azaria and other government officials that a family prominently involved in SpotOption are leaders of the Georgian faction of the Likud Central Committee and that he needs their support to maintain his position in the Likud.

The widely fraudulent Israeli binary options industry is estimated to generate between $5 billion and $10 billion a year. It has been estimated to number well over 100 companies, and to employ between 5,000 and tens of thousands of employees.

The Times of Israel began exposing the fraud in a March 2016 article entitled “The wolves of Tel Aviv: Israel’s vast, amoral binary options scam exposed.” The fraudulent firms ostensibly offer customers worldwide a potentially profitable short-term investment. But in reality — through rigged trading platforms, refusal to pay out, and other ruses — these companies fleece the vast majority of customers of most or all of their money. The fraudulent salespeople routinely conceal where they are located, misrepresent what they are selling and use false identities.

Israel Police Superintendent Gabi Biton told the Reforms Committee on August 2 that Israeli crime kingpins are behind the binary options industry and that organized crime in the country has been massively enriched and strengthened as a result of law enforcement’s failure for many years to grasp the vastness of the problem.

“Our eyes have been opened,” said Biton, who investigates financial fraud and money laundering. “What we’re seeing here is a massive organized criminal enterprise. We are talking about criminals at various levels of crime organizations, up to the very top.”

At Monday’s Reforms Committee meeting, the third of three held by the committee in the past week, the main topic of discussion was binary options platform providers like SpotOption, TechFinancials and Panda, and whether or not they would be allowed to continue to operate from Israel even as the firms and call centers to which they provide technology are outlawed.

Representatives from SpotOption argued that they merely provide technology to binary options websites and that the bill should be changed so that their activity is not banned. Representatives of Israel’s Justice Ministry and the police said that platform providers, without naming SpotOption specifically, in fact host and operate the binary options websites and receive a percentage of each transaction, and therefore should be covered by the ban, as they will be if the law passes in its current form.

MK Oded Forer (Yisrael Beytenu) had asked, in written comments on the proposed law prior to Monday’s committee meeting, to make changes similar to those being sought by lawyers for the platform providers. He told the panel that “I think we can pass a law that does not hurt technology companies. It is possible that in six months the Israel Securities Authority will change its mind about this, but if we close something it might be impossible to re-open.”

Forer likened selling binary options technology platforms to selling weapons systems. “If an Israeli company sells a weapons system to a foreign country and the country uses it for something bad, is that Israel’s responsibility? Did Israel commit a crime?”

But police superintendent Biton told the panel that the technology companies behind binary options websites do in fact participate in the websites’ questionable activities. “They run the websites and the payment processing, and also have the ability to influence the results of trades,” the police officer said.

Deborah Abitbol, who as a lawyer licensed in France has access to the case files of French law enforcement’s investigations into binary options and forex companies, told the panel that according to French investigators, binary options technology platform providers have a button they can press that causes a trader on one of their websites to lose their money.

Abitbol also complained that many of the victims she represents lost their money to fraudulent Israeli forex companies and asked why the proposed law had been watered down to omit the clause requiring Israeli forex and CFD companies to obtain a license in the countries where they operate.

Moshe Avrahami, the CFO of SpotOption, told the panel that he strongly rejected the insinuations he said were voiced at the meeting that his company is fraudulent and cheats customers, and he denied that there was a “secret button” on the trading platform that could be used to cause clients to lose.

“They are saying that binary options technology companies allow people to cheat traders with a secret button. I know of no such thing. Our software is fair, and trustworthy. We have passed scrutiny with the most rigorous regulators — Cysec [the Cyprus securities regulator], for instance, and Japan. There is no regulator that is stricter than Japan,” he said.

Drama at the committee

At the start of Monday’s panel session, there were only two Knesset members in the room — Forer, who proposed changing the bill so that binary options “technology” companies would not be hurt, and committee chairwoman Azaria, who supported the bill with its ban encompassing platform providers like SpotOption.

A source close to the legislation told The Times of Israel that the presence and absence of various MKs was no accident, but the result of a pitched behind-the-scenes battle between proponents and opponents of the proposed binary options ban.

As the session got underway, with only Forer and Azaria in the room with the right to vote, it seemed as though binary options industry lobbyists might succeed in further weakening the bill to exclude platform providers like SpotOption from its provisions. Then, Shas MK Yigal Guetta appeared and began arguing in favor of the bill in its current form.

“We must not open any loopholes in this law,” Guetta declared. “This law does not threaten Israeli high-tech. If it did, we would have hundreds of Israeli high-tech companies here protesting. The [binary options platform providers] are using scare tactics. I think we should go with the law the way it is now.”

A few moments later, Jelin of the opposition Yesh Atid appeared. Jelin, together with Forer, had expressed reservations about the current text of the law in comments prior to the session. “I am here because I want to protect startups and young people developing software,” he told the panel. “I don’t want to see technology companies running away to Cyprus because binary options is regulated there and not here.”

But Jelin relented after he was reassured that pure technology companies would not be affected by the law and that only companies that operate binary websites and take a percentage of their earnings would be shut down.

When Azaria called for a vote, all four Knesset members voted in favor of the binary options ban, including the provision banning technology providers.

Azaria then called for a process known as revisia, in which all four Knesset members went off to a private room for half an hour and discussed possible revisions to the bill.

Both Azaria and Forer told The Times of Israel that the revisia process is a procedural one that guarantees that no further revisions can be made to the law before it goes to the plenary. After these revisia discussions, all four MKs returned to the committee room and voted publicly to ensure that no further revisions could be made to the proposed law.

As that vote was getting underway, MK David Bitan entered the room, accompanied by Moshe Avrahami from SpotOption.

“Here’s the sheriff,” exclaimed Ariella Malka, the administrative director of the Reforms Committee, referring to Bitan’s role as Knesset majority whip.

“There’s a problem with the law,” declared Bitan.

“This is what is called a last-minute development,” said Malka.

Bitan motioned for Avrahami of SpotOption to come closer. Avrahami said to Azaria and the other MKs that there was a contradiction in the proposed law regarding technology companies. “It seems there is no problem for a technology company to sell software according to the law,” Avrahami said, “but the explanatory notes prohibit it.”

Azaria and a legal adviser for the Justice Ministry began arguing with Bitan. “We sat down with the Israel Securities Authority and the Justice Ministry to make sure this law doesn’t cover more than it absolutely needs to. He can sell his software, he just can’t earn money from forbidden things.”

“So you want him not to earn anything?” asked Bitan, referring to SpotOption’s Avrahami.

“He can as long as he does not earn from things that are against the law,” said the Justice Ministry adviser.

“Bitan, let me give you some advice,” said Jelin. “Be careful or someone will have a fit of craziness and go back to the old version of the law [the one that prohibited operating forex and CFD sites without a license], and then everyone will lose.”

“The problem is,” said Avrahami of SpotOption, “that this law creates exposure to the money laundering law and the punishment is two years in jail.”

“That didn’t even go into the law,” exclaimed a government official in the room. (The Times of Israel was later told that a provision against money laundering has remained intact.)

“Bitan, you want to reopen the law?” threatened Jelin. “We will go back to the original law.”

“You know I am not afraid of you,” replied Bitan.

Bitan then asked that the Justice Ministry’s clarification of the clause pertaining to technology platforms be put into the Knesset protocol. A legal expert told The Times of Israel that the protocol is often used in lawsuits attempting to show that a law is self-contradictory or problematic.

Bitan then stepped away from the other MKs and began arguing with Azaria about when the law would come up for a vote in the plenary.

“I have had it up to here with the law against money laundering,” Bitan said. “You can’t even do anything in this country anymore.”

“That is not the issue,” said Azaria. “This is a very important law. Binary options is causing anti-Semitism around the world.”

“I’m very busy,” replied Bitan. “And I can’t bring this up during the Knesset recess. Why is this so urgent? It can wait.”

Last October, the office of Prime Minister Benjamin Netanyahu, Bitan’s Likud party leader, called for a worldwide ban on binary options.