Bits Of Gold Get Licenses From The Israeli Capital Market, The First Of Its Types

JAKARTA - Israel-based crypto exchange Bits of Gold became the country's first crypto company to receive a license from the Capital Market Authority. This is known from the company's blog post on Sunday, September 19.

As a consequence of licensing, Bits of Gold will be able to store digital currencies through secure storage in the Bits of Gold Wallet they have been working on for some time. It will also start providing services that allow banks and other financial institutions to connect to its digital asset services.

In a public statement, Bits of Gold said that the license was the next step in its mission to make the world of digital currencies more accessible to the Israeli public in a simple and safe way.

Authorities in Israel have restricted cash payments in the country for trying to combat illegal activity and pushing for a transition to domestic digital payments.

However, institutional adoption in the country is slow because Israeli banks are very unfriendly to crypto services and there is still a blockage today, citing the Anti-Money Laundering (Anti Money Laundry) issue.

In 2017, Israel's Supreme Court ruled that local bank Leumi was legally allowed to refuse services to Bits of Gold, when the bank claimed that Bitcoin (BTC) nature made it impossible for them to follow AML requirements.

However, the Supreme Court's position changed in 2019, when it ruled that Leumi could not block the Bits of Gold account based on regulatory issues, and thus set a precedent for other cryptocurrency companies.

The implementation of the new AML regulations by the government in Israel is increasingly paving the way for cooperation between banks and the crypto industry. The development also stipulates the requirement that crypto companies must have licenses, even though companies that apply for them are given permission to temporarily continue their operations.

Another obstacle to institutional adoption in Israel is its tax law. The country was recently upgraded as the third worst country to crypto taxation, according to a report released by crypto analytics firm Coincub on September 8.

According to Coincub, crypto sales are generally subject to a capital gain tax of up to 33% in Israel and if investment activities are considered business-related, they will be subject to an income tax of up to 50%.

While the Capital Market, Insurance and Savings Authority has granted Israel's first crypto license to Hybrid Bridge Holdings infrastructure company earlier this month, licenses received by Bits of Gold represent the first to be awarded to active brokers.