The Israeli Tax Authority (ITA) has entered a deal with the biggest Bitcoin exchange in the country. The crypto exchange which is based in Tel Aviv has agreed to report authorities which transfer over $50,000 of the digital currency.
The Israeli Tax Authority entered into an agreement with Bits of Gold which is said to be the biggest exchange for trading in Bitcoin and Ethereum. The move signals the government’s determination to curb money laundering or other illegal trades through the use of cryptocurrency.
Not mandatory
It is not mandatory for any crypto exchange in the country to comply with such rules since the Israeli Tax Authorities are not entitled by the law to compel any crypto exchange to report on its clients’ transactions. Thus, for Bits of Gold to agree to such a deal is seen as a breakthrough in trying to restrict illegal activities in its platform.
However, exchanges in Israel are required by the Israel Money Laundering as well as the Terror Financing Prohibition Authority to report suspicious transactions. Bits of Gold Chief Growth Officer, Tomer Niv said that his exchange only transfers the information they are required by the law, which is still in the hands of the Israel Money Laundering and Terror Financing Prohibition Authority, in order to protect the privacy of customers on the one hand, and the provisions of the law on the other.
Audit
Before reaching the agreement, the Tax Authorities had looked into the operations of Bits of Gold. The ITA is said to be considering partnering with other firms in the cryptocurrency industry to report large transactions in digital currencies. It is believed this is as a result of the Tax Authorities being pleased by what it found in Bits of Gold.
Early in the year, an Israel Security Authority (ISA) special committee gave its recommendation that digital assets should not be viewed as security in case they are found to be used for consumption.
As a result, the Israel Ministry of Finance directed that all cryptocurrency exchanges operating in the country be supervised. This signaled the government’s intention to conclude the legal framework surrounding the use of cryptocurrencies.
