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Israel has reportedly enacted new regulations related to the cryptocurrency industry in order to combat illegal activities such a money laundering and terrorism financing.
The government of Israel enforced new Anti-Money Laundering (AML) regulations on Sunday, requiring local fintech companies and virtual currency service providers (VASP) to obtain an operating license, local news agency Globes reported.
The Israel Securities Authority, the Capital Markets, Insurance and Savings Authority, the country’s independent financial regulator, is now reportedly in the process of reviewing various VASPs that have applied for such a license.
Shlomit Wagman, director of the Israel Money Laundering and Terror Financing Prohibition Authority, said that the new AML rules would help the country curb criminal usage of digital assets while also providing the industry with more support and legitimacy, The Jerusalem Post reported.
“The application of the regulations constitutes real progress for the Israeli economy, the fintech industry and for improving financial competition,” the official said.
The Israeli government has been actively working on regulations to combat illicit activities related to crypto this year. In July, Israel’s Ministry of Finance proposed a law requiring residents to file tax declarations for crypto purchases above $61,000. Previously, the Israeli defense minister reportedly authorized security forces to seize crypto accounts believed to be tied to the militant wing of Hamas.
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In the meantime, Israel’s central bank has been experimenting with its own digital currency. As previously reported, the Bank of Israel issued a central bank digital currency through a pilot test of a digital shekel as of June 2021.