Israel Enacts New Anti-Money Laundering Rules for Crypto Businesses
Israel has reportedly implemented a new set of AML regulations for crypto businesses in a bid to combat terrorism financing and money laundering. According to the Israeli government, fintech companies in the country and digital currency service providers are now mandated to obtain a license to operate. The government revealed this on Sunday, November 14.
After the new set of regulations were implemented, the Israel Securities Authority, alongside the Insurance and Savings Authority, began the process of reviewing digital asset service providers or VASPs that once submitted an application for licenses to operate.
New AML Rules Will Provide More Support to the Industry
Head of the country’s Money Laundering and Terror Financing Prohibition Authority Shlomit Wagman, disclosed that the new rules implemented on Sunday will reduce and possibly get rid of criminal activities involving cryptos. In addition, Wagman stated that the rules will provide more support to the crypto industry as well as the fintech industry. The applications for licensing signifies real progress for the economy and the fintech industry at large as well as enhance financial competition.
Since the start of the year, the government has been working relentlessly to curb illicit activities involving cryptocurrency. In a bid to strengthen its effort in the global fight against tax evasion and terrorism funding through cryptos, the country’s Ministry of Finance proposed a law to track digital asset holdings above $61,000 in July. According to the drafted bill, the Ministry is suggesting measures to place crypto holders and users under intense scrutiny.
The proposed bill mandated crypto users with virtual currency purchases equal or exceeding $61000 to file a report with the country’s tax authorities. Israelis who have held, either personally or on behalf of a minor, the stated worth of crypto or above on more days within the tax year are obligated to report. The new tax system is awaiting approval, and has been reportedly revealed that the country will generate revenue amounting to almost $9.2M in 2022 if signed into law.
Few weeks before that, the Israeli Defense Minister Benny Ganz, ordered the seizure of crypto accounts linked to Hamas militant organization, the de facto ruling council in Gaza Strip, Palestine. Hamas had found refuge in cryptocurrency due to its financial limitations. Reports had it that Hamas was planning to raise funds through crypto. Ganz allegedly stated the Ministry’s National Bureau for Counter Terror Financing uncovered some electronic wallets containing USDT, ETH, DOGE, BNB, LTC, etc. Ganz believed the wallets were tied to the organization.
Currently, Israel has joined other countries of the world to experiment with its central bank digital currency. In June, the Bank of Israel pilot tested its digital shekel.
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