An Israeli anti-money laundering regulation has come into effect, which applies to all financial service providers: fintech companies, credit providers and cryptocurrency companies.
According to the new order, entities that provide these services will comply with their obligations. To prevent the possibility of money laundering or terrorist financing through them.
In fact, the entry into force of this order opens the door for entities engaged in digital currency transactions to grant permanent operating licenses.
However, as of now, the regulator responsible for capital market supervision is still reviewing various cryptocurrency entities that have submitted licensing applications.
The anti-money laundering order provides for the identification and verification of service recipients. As well as implementing client approval procedures and complying to supervise service recipients. Regulations on the reporting obligation of the active authority. Including reporting the normal activities and abnormal events of the service recipient.
This order lists different account opening conditions with remote client identification. Make it easier for fintech companies to operate without having to meet with customers face to face. In addition, the order also contains provisions regarding electronic transfers of funds and digital currencies in Israel and abroad.
In parallel with this order, the Capital Markets Authority recently issued a draft notice on money laundering and terrorist financing management. The notice applies to all activities and financial service providers regulated by the order.
Israel tightens regulation of cryptocurrencies
In fact, the country’s financial authorities have been tightening the regulation of cryptocurrencies before. According to the news in July this year, the Israeli government is stepping up its efforts to prevent tax evasion and plug possible loopholes for money launderers. The proposed law by the Israeli Ministry of Finance will make it mandatory. Purchased cryptocurrency worth 200,000 NIS ($61,000). Or users who currently hold cryptocurrencies with the same value or higher must submit a report to the Israeli tax authority.
This reporting obligation applies to any Israeli citizen. If he personally or on behalf of a child under the age of 18 holds value during one or more days of the tax year. For cryptocurrencies that reach or exceed this amount, a report is required.
If approved, the introduction of this measure will increase national income through additional taxes in 2022, estimated at 30 million new shekels ($9.2 million).
As early as the end of last year, the Israeli tax authorities were issuing notices to the country’s cryptocurrency holders. They are required to fully disclose their cryptocurrency holdings so that they can be taxed accordingly.
In addition, the tax authorities have issued notices to several crypto exchanges operating at home and abroad. Require detailed reports of Israelis trading digital assets on a global scale. Market voices believe that with Bitcoin in this bull market, the popularity of the season continues to soar. The government may increase tax enforcement efforts.