A report by VentureBeat has highlighted how Israel’s coming crypto laws are set to redefine the country’s crypto market.
ICOs with connections to Israel raised just under 500 million USD in 2017, a figure which has spurred regulatory action in the country. Israel’s tax authority published a circular concerning cryptocurrency taxation in January. It stated that digital currencies were ‘financial assets’ and therefore liable to taxation. However, efforts to regulate the country’s ‘non-institutional’ currencies such as cryptocurrencies go back to at least July 2016, when the Knesset passed a law to give individuals and businesses working with such assets a means to be licensed and supervised, increasing market confidence in such assets and limiting criminal activities.
The law has been slowly rolled out and its sections which deal with cryptocurrencies will be enforced from October 2018. This process will likely culminate in the regulation of cryptocurrencies such as Bitcoin and, if proven viable, pave the way for similar regulations in other legal systems.
A paper published by the state regulator in May 2018 indicates how cryptocurrencies may be regulated in the country. It may require crypto traders to not only include their own data but also the IP addresses of all clients and any public addresses of virtual currency wallets with which the business transfers tokens. Several behaviours will raise red flags which will require further paperwork to be filed. This includes the use of virtual private networks by any party to a trade and any transactions with fully anonymous cryptocurrencies such as Monero and Zcash.