While markets were expecting the new cryptocurrency legislation to become effective in Israel tomorrow, the latest reports claim that Israeli new cryptocurrency law postponed. What is the reason behind such turn?
31 May, AtoZ Markets – Earlier this week we have reported that Israel was about to introduce the new law for cryptocurrency markets.
Crypto Money Laundering Law Draft
It was anticipated that the new law that will regulate financial service providers will come into effect on the first of June. The new law included the provision for digital assets providers for the first time. There was a draft notice that came with the law. It has stated:
“The definition of a service in connection with financial assets is being expanded beyond currency services, to includes all activities and services performed by a business in connection with financial assets that does not include credit.
Among the financial assets added to the definition is a virtual currency, with the intention of allowing supervision of financial services other than tangible assets or standard financial means, in a field that has been developing in recent years.”
However, the latest online reports from Israel claim that the law has been postponed until October 2018.
Israeli New Cryptocurrency Law Postponed
In the latest developments, finance minister of Israel Moshe Kahlon has urged that the new law would be postponed until the addition related to the asset providers was ratified. He has stated:
“The existing ordinance for the prohibition of money laundering will lapse with the passing of the new law. The process of installing the new law, which includes public hearings, will take time. Consequently, there will be a period in which there will be no active legal provision concerning this matter, which will lead to a lack of clarity regarding the identification and reporting obligations imposed by the order on prohibition of money laundering.”
As per the local media reports, the officials have decided to postpone the law implementation date.
The statement from the Israeli Bitcoin Association has followed the decision of the authorities in relation to the law. Manny Rosenfield, who is the head of the organization, has noted:
“The postponement of the law that deals with digital currencies will leave start-ups in the same situation, and will cause a situation in which these companies will have to think twice about whether or not to stay in Israel…This is a blow that will hamper the efforts of Israel to become a leader in a rapidly developing field of technology.”
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