Israel’s crypto regulations drama drags on
Israel’s parliament decision to postpone the law regulating cryptocurrency exchanges by four months has ignited a lively debate in the country.
As reported at the end of last month, the Finance Committee of Israel’s parliament (the Knesset) made the postponement.
The original law was to take effect on 1 June and the decision meant financial services providers and Israeli companies are without any regulation for these exchanges.
In the latest chapter, Moshe Pearl, the chairman of the Association of Banks in Israel, sent a letter to Dr. Hedva Bar, the supervisor of banks.
Pearl writes that “the binding position” of the Banking Supervision Department has “not yet been clearly expressed” and “the banking system is exposed on several fronts, and this is not a situation that can and should be accepted”.
As you’d expect, others have opinions on this current state of affairs. They want action. And they want it fast.
Dror Shapira, head of Inviou, a blockchain-based platform designed for invoice and credit finance management, weighs in with some words.
He says: “In Israel, there has been a significant increase in activity in the crypto industry, without a regulatory arrangement being set by the Bank of Israel, and without a specific directive to the banking system regarding how it should behave towards customers. Since there are no explicit rules for that kind of activity, each bank sets its own policy, usually a strict policy that makes it difficult for any activity in this field.”
Shapira adds: “The banks are in an impossible situation. On the one hand they are subject to strict requirements regarding the prohibition of money laundering, and on the other hand, are obligated to allow customers to open accounts and provide them with banking services. Crypto activity is gaining momentum. This is a complex and sensitive issue which requires regulatory intervention that will finally provide clear guidelines and rules for action. The time has come.”
The Association of Banks says that recently some regulators began to relate to the issue of virtual currencies.
The Tax Authority published a circular at the beginning of the year, and the Money Laundering Authority and the Securities Authority began to examine the implications on trade aspects.
Stay tuned folks. I am sure chapter three will be on its way later.