Israel Postpones Cryptocurrency Regulation

Israel's officials should have passed the new law regulating cryptocurrencies in this country this Friday, but this has been delayed until at least October, posing a huge blow to the hopeful Israeli cryptocurrency market. The law is supposed to cover various aspects of financial service providers for digital aspects which would be a huge relief for cryptocurrency customers and businesses in this country because Israeli banks are not supporting them. The legislation, created by Ministry of Justice, would obligate banks and other institutions to regulate suspicious transactions with digital currencies, including the crypto transfers to online gambling websites.

Finance minister, Moshe Kahlon, has requested some ratifications of this legislation: “The existing ordinance for the prohibition of money laundering will lapse with the passing of the new law. The process of installing the new law, which includes public hearings, will take time. Consequently there will be a period in which there will be no active legal provision concerning this matter, which will lead to a lack of clarity regarding the identification and reporting obligations imposed by the order on prohibition of money laundering.”

The legislation will require banks, brokers and cryptocurrency platforms to report every suspicious activity relating to Bitcoin and other digital currencies. It also aims to prevent money laundering and fraudulent activities in regard to the virtual currencies movement. Every customer's cryptocurrency activity will be closely monitored, including their digital wallet and IP addresses.

Israel is still one of the nations with the most hostile stance towards digital currencies. Not long ago, they issued an act forcing all Bitcoin holders to pay taxes on all gains retroactively. This act of regulation of the market may be a good sign that better times are coming for digital currencies in Israel, but with such strict and invasive regulatory policies, it remains to be seen if this will indeed be good news or trouble in disguise.

Source:

"Israeli Cryptocurrency Regulation to be Delayed, Dealing Blow to Industry”, Goldstein Simon, financemagnates.com, May 30, 2018.