Nikolas Sargeant
The Israeli government is interested in tracking large cryptocurrency holdings in a bid to battle tax evasion and other vices such as money laundering.
Israel will track crypto holdings above $61k
The Israeli government is planning to track cryptocurrency holdings above $61k. The proposed regulation is expected to allow the government to battle tax evasion and close loopholes for would-be money launderers.
This is part of the government’s effort called the “war against black capital” and it involves a wide range of measures published by the Ministry of Finance. The proposed law would see Israel implement greater scrutiny on cryptocurrencies.
According to the bill, it would be mandatory for cryptocurrency users who purchase 200,000 Israeli shekels ($61,000) worth of cryptocurrencies or who hold a similar amount of cryptos and above to report to the tax authorities.
It states that “Virtual currencies have become commonplace among the public, and they are practically traded as an asset on exchanges. Digital coins can be subdivided into small units, transferred relatively easily by electronic means, and are not subject to surveillance or inspection.”
The government agency pointed out that cryptocurrencies have become a convenient and effective means of concealing earnings, accumulating undeclared assets and also being used for money launder.
The new rule would also apply to any citizen who holds cryptocurrencies personally or on behalf of a child under 18. The amount of cryptocurrencies has to be worth $61k and above. According to the government agency, if the bill is approved, it estimates an additional 30 million shekels ($9.2 million) in 2022 via taxes.
Meni Rosenfeld, chairman of the Israeli Bitcoin Association, believes that the extensive reporting obligation would lead to the creation of a database of Bitcoin holders in Israel. If that happens, Israel will become the first country to have a database of cryptocurrency holders.
The cryptocurrency market is slowly recovering from its recent slump, with Bitcoin already trading around the $40k region.
