Israel imposes tighter crypto regulations to curb terror financing and money laundering
The Authority for Combating Terror Financing and Money Laundering announced through its authority director that it has effected new crypto regulations to combat criminal activities. The new regulations shall are also expected to normalize the use of cryptocurrency and other FinTech products in Israel.
The regulations are designed to set the minds of potential crypto and FinTech companies at ease by ensuring that the companies are compliant with all the set rules.
The director of the authority, Shlomit Wegman, noted that the new regulations shall help establish a clear and orderly standard within the industry.
The new crypto regulations are based on the recommendations made by the Financial Action Task Force (FATF) in 2018.
The Financial Action Task Force (FATF)
Financial Action Task Force has 39 members and it also consists of a network of similar bodies around the world. It encompasses 200 jurisdictions.
The FATF is designed to address the issue of self-regulation.
Previously, there was a lack of regulatory oversight in Israel that made it easy for money laundering using crypto entities. Money could be easily and quickly moved between crypto entities with accountability.
Israel-US partnership to fight crypto-related crimes
In May 2020, the US Commodity Futures Trading Commission (CFTC) penalized several Israeli and American companies for encouraging binary options and crypto scams that affected US citizens.
The development came amid a partnership between Israel and the US Department of Treasury to tackle ransomware attacks that had become so rampant.
Several American companies have been attacked using ransomware and the attackers mostly request for payments to be made using either Bitcoin (BTC) or Monero (XMR).
Recently, Israel’s National Bureau for Counter Terror Financing seized some cryptocurrencies that had been transferred to the Hamas organization for use by its military wing. The seizure was preceded by an increased donation in form of cryptocurrency to the Hamas organization.
What have the new crypto regulations introduced?
Every crypto company operating in Israel or offering services to Israeli citizens is now required to submit its financial reports. Including bank reports.
There are also comprehensive identification standards that improve the granularity of digital paper tracking.