Because of complaints of fraud, Hamas bans forex trading in Gaza

The Hamas government has banned trading in the foreign currency exchange market, known as "forex", without permission from the Gaza-based Ministry of Economy.

In a press statement sent to The New Arab, the ministry said it had issued a decision banning any person from selling or buying foreign currencies, securities, or other currencies on foreign exchanges.

The statement also said that the government prohibits holding any courses or training programs related to trading in foreign exchange, stressing that anyone who violates the provisions of the decision will face strict legal measures.

Yaqoub al-Ghandour, an official at the ministry, told The New Arab that the decision comes after the ministry received "several complaints of people who lost their money and were subjected to fraud through foreign exchange."

"A number of unlicensed individuals or companies in Gaza have exploited the goals for which they were founded, and have engaged in this trading with the intention of defrauding people who have no experience in this field,” the official said.

He explained that more than 80 to 90 per cent of the people who worked in the "forex" trade in Gaza have lost their money.

However, the official noted that the decision excludes companies, banks, and other institutions that have obtained licenses from the Monetary Authority that is acting in charge of the Palestinian Central Bank. 

A month ago, the Hamas-run government in Gaza banned any transactions or work related to "network or pyramid marketing."

At the time, the ministry's decision stipulated a ban on "selling, buying, importing, trading, advertising or promoting any good or service through the network or hierarchical marketing by any means, whether electronic or non-electronic."

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In recent years, several offices specialising in currency trading have emerged, often holding training courses or encouraging investors through promises of a percentage from the "alleged" profit.

In an attempt to reap profits, thousands of Palestinians in Gaza jumped into trading in foreign currencies, with some going as far as selling their homes, gold, or other possessions.

But after a while, many began realising that they had lost their money, and reporting that they had been defrauded by the companies specialised in trading.

Noha Odwan, a Gaza-based resident, told The New Arab that she sold her gold jewellery several months ago to invest in foreign currencies through a local broker claiming to have enough experience to guarantee her profit.

"I deposited about $US 3,000 hoping to get double the amount as a profit (...) At first, the broker was giving me about $US 200 over four months, as it was my profit, and the capital is the same."

But without any prior notice, says the 42-year-old mother of four, the mediator was no longer in Gaza, his phone was turned off, and it was discovered he had escaped to Turkey.

In an attempt to recover her money, the young woman filed a complaint with the police against the broker, but she was shocked that hundreds of other people were also filing complaints against him.

"He scammed us all and stole our money," she said.

Amjad al-Amassi, another resident from Gaza City, was lucky that he did not fall into the same problem as Odwan. He said his friend offered work in foreign exchange, but he had refused due to not knowing enough about this field.

"Unfortunately, my friend lost large sums of money, not to mention that he is currently being prosecuted for fraud because he encouraged others to enter this field, while the main broker fled to Turkey," al-Amassi said.

Gazans usually invest their money in currency trading through local brokers. Still, when they receive their "alleged profits", it is usually through external remittances via money transfer programs such as Western Union and MoneyGram.

The owners of the exchange shops get around 10% of the value of the money that arrives through foreign currencies.

The New Arab has tried to contact certain exchange shop owners for comment, but they refused to speak on this issue.