Israel Authorizes First Digital Trading Platform

Bits of Gold, a Tel Aviv-based digital trading platform, received a license to operate in Israel. This development made them the first digital asset exchange authorized in the nation. The authorization allows them to cooperate with the nation’s financial organizations.

The First Authorization

The Capital Market Authority authorized the Bits of Gold digital platform. It was first announced in a Facebook post by the trading platform last Sunday.

Meanwhile, this license will enable the exchange to hold digital assets in their Bits of Gold Wallet, which they have developed over time. They will also have access to render digital asset-related services while interrelating with the financial institutions in Israel.

Further, the trading platform revealed that they aim to make safe and easy cryptocurrency services available to every citizen in the nation.

Challenges Faced By Crypto In Israel

In their quest to fight financial crimes and promote digital payments, the Israeli government recently banned payment by cash in the nation. 

However, the financial establishments in the nation have not welcomed digital assets with open arms. They often restrict crypto-related services using Anti-Money Laundering problems as excuses.

The unfriendly treatment of digital assets was encouraged by the nation’s Supreme Court ruling in favor of Bank Leumi in 2017. The banks failed to render financial services related to digital assets to Bits of Gold because they claimed BTC makes it challenging to adhere to AML regulations.

However, the Supreme Court had a U-turn in its ruling two years later. The court ruled that regulatory concern is insufficient to freeze an account belonging to Bits of Gold.

The enactment of the AML rules fosters a cordial relationship between the virtual assets industry and financial organizations. The rules also mandated digital asset enterprises to acquire authorization from regulators. However, the firms were only given temporary operating approval for now.

Taxation is another issue confronting digital asset firms in the country. The authorities charge a 33% tax on gains received from trading cryptocurrencies. They also charge 50% income tax on crypto-related investments that are considered a business.

These taxation rules make Israel’s digital assets ecosystem hostile to digital asset establishments. According to the information disclosed by Coincub, Israel is one of the top 3 countries digital asset companies should avoid.

Earlier, Hybrid Bridge Holdings Ltd was permanently authorized as the first enterprise permitted to conduct digital assets-related businesses. Bits of Gold, however, is the first active broker to acquire authorization.