When it comes to the latest innovations in technology, Israel is known by some as a “Startup Nation.” In 2017, Israeli ventures have raised over $5 billion in capital. This is about 10% of China’s annual fundraising tool.
Hapoalim, one of the largest banks in Israel, created a partnership with Microsoft in order to make a Blockchain platform that helps sign up guarantors in a simple and secure method. This February, Israeli Tax Authority announced that cryptocurrencies are viewed as digital properties and will be taxed.
On February 26, 2018, Israel took it further. The Israeli Supreme Court gave a decision that would suspend Leumi Bank and Bits of Gold from allowing cryptocurrencies to be sold without their regulation.
The judge who ruled the case, Anat Baron, stated that her decision was to “attack the banks for each transaction that takes place or to do actions that will minimize their risk” This means that cryptocurrency exchanges and brokers who put transparency first will be viewed as legal – for now.
Yuval Roash, the CEO, and Founder of Bits of Gold, agrees with the decision saying “Regulation has been very important towards the cryptocurrency industry since the beginning. Ever since Bitcoin gained popularity, we found that its anonymity characteristics would serve a problem. So, we’ve planned to obtain a currency service certificate – And on August 2013, we finally obtained one”.
There has been noticeable progress since December 2017, when Tel Aviv’s district court made a decision that favored Leumi Bank. The bank refused to serve Bits of Gold due to the possibility that Bitcoin can’t meet their anti-money laundering requirements.
Bank Leumi had also followed Bank of Israel last June when they labeled exchanges as “suspicious websites that consist of gambling transactions,” which is one of Israel’s sore spots. Israel has been very cautious about disrupting the balance of its borders. In fact, they even blocked the popular ride-sharing app Uber from launching in the country.
After viewing Bits of Golds’ previous 5-year history, Judge Baron stated that Leumi’s assumption that a law violation would occur if Bitcoin remains unregulated was false.
Regardless of the ruling decision, Israel’s blockchain innovations hasn’t slowed down. “Like any promising and new technology, the legal systems that are able to create policies that allow adoption and innovation, will help attract business and talent to their ecosystems. The best legal frameworks will be one that uses a learning approach, they will allow institutions and entrepreneurs to understand how blockchain technology affects the stakeholders and create policies that benefit everyone,” said Bancor’s Co-Founder, Galia Benartzi.
As the crypto world is getting hit with multiple government regulations worldwide, it still shows some hope. There are startups, businesses, and legislators that are still working to help it become legalized.
Do you have any questions about how Israel plans on legalizing cryptocurrency?
Tell us in the comments below.