1.2 Historic and economic background

The first regulated binary options took place in the US in 2008. In early May 2012, the Cyprus Securities and Exchange Commission (CySEC) included Binary Options to the list of financial instruments recognized by the law of the Republic of Cyprus on Investment Services, Investment Activities and Regulated Markets of 2007.

Thousands of brokers and traders worldwide were massively employing this instrument back then. It was greatly favored for the simplicity of concept and high chances of success. The industry was experiencing exponential growth until 2014, reaching tens of billions of dollars in its annual turnover.

But something went wrong there. In the following years, regulators from all over the world have been making rather strong statements, claiming that binary options is a deceit and discouraging traders to get involved.

For instance, American Regulators have issued a "Warning to Investors", which explained that legitimate platforms for binary options trading must be registered with authorities and comply with a set of rules. And yet, no web-platforms, brokers, or whatsoever, possess the relevant registration in the US. "The Times of Israel" magazine has published a series of articles entitled "Wolves of Tel Aviv: The Grand Immoral Cheating of Binary Options", exposing the binary options industry as a big scam.

The Commodity Futures Trading Commission warns that “online platforms for binary options mislead users, promising huge gains at a limited risk. In reality, users lose their money in days while companies make profits”.