The Israeli Tax Authority has requested customer info from one of the largest crypto exchanges in the country.
The Israeli Tax Authority is on a rampage to find money laundering activity and lately has been focusing on cryptocurrencies.
According to Calcalist, a local news outlet, Bits of Gold, the largest cryptocurrency Broker in the country, has established an agreement with the Tax authority which forces the company to deliver customer information.
The terms of the agreement allow the Israel Money Laundering and Terror Financing Prohibition Authority to access data of customers that make more than $50,000 in 12 months.
Meanwhile, the authority will only have access to the data as it cannot be transferred because of complex privacy laws.
The Chief Growth Officer of Bits of Gold, Tomer Niv told Finance Magnates:
“We at Bits of Gold only transfer the information we are required by law, which is still in the hands of the Israel Money Laundering and Terror Financing Prohibition Authority, in order to protect the privacy of customers on the one hand, and the provisions of the law on the other. ”
Cryptocurrency Taxes in Israel
Back in February 2018, the Israeli Tax Authority (ITA) released new guidelines regarding distributed means of payment.
In the past, cryptocurrency has been considered to be property, and as so the ITA taxes cryptocurrency as if it was a commodity.
While private investors do not have to pay VAT (value added tax), all profits made in the form of cryptocurrency are taxed.
Mining operations and cryptocurrency related companies such as exchanges are taxed like any other business.
Bits of Gold
Bits of Gold is one of the most popular cryptocurrency exchanges in Israel. The exchange already counts with 50,000 registered customers and still growing its database.
Last year, after one of the largest banks in the country suspended its account, the exchange filed a lawsuit against Bank Leumi and lost. The Tel Aviv district court disregarded the fact that the company was following all the KYC procedures and decided against the company.
In February 2018, Israel’s Supreme Court discovered the bank had classified the exchange as an online gambling site and invalidated the Tel Aviv district court previous decision.
It ordered the bank to allow undefined limits to Bits of Gold bank account.
So far the company has been complying with all the legal terms as to provide the required information, complying with all the KYC and any other legal obligations, so the agreement with the Israeli Tax Authority is no surprise for the industry players in the country.