Israeli financial authorities are stepping up their efforts to regulate bitcoin-related investments

• Insurance and financial firms may be obliged to detail and justify any bitcoin-related investments
• According to Calcalist, the authority described bitcoin as a speculative asset with no intrinsic worth
• The country’s financial authorities have begun strengthening crypto restrictions

According to Israeli business publication Calcalist, Israel’s Capital Market, Insurance and Savings Authority are requiring insurance companies and investment houses to detail and justify any bitcoin investments. According to Calcalist, the authority described bitcoin as a speculative asset with no fundamental value in a letter addressed to banks under its supervision on Wednesday.

Israeli’s first bitcoin linked investments

According to Calcalist, the letter was sent in response to (and only a day after) the Tel Aviv Stock Exchange (TASE) and digital currency investment firm Silver Castle announced the country’s first bitcoin-linked bonds would trade on TASE UP, the exchange’s private company trading platform.

The country’s financial authorities have begun strengthening crypto restrictions. The Ministry of Finance submitted a measure at the end of July that would compel all crypto holdings worth more than $61,000 to be declared to the tax office. According to a recently released Justice Department report, a new anti-money laundering order that includes virtual currency service providers will take effect in November. According to the Justice Department investigation, financial authorities, including the Capital Market Authority, were involved in the legislation’s development.

Institutional investors will also get exposure to Bitcoin

TASE stated in its statement that the new bonds will provide institutional investors with exposure to bitcoin while reducing operational risks and product holding costs. According to the press release, the cash raised in the [issuance of the bonds] will be utilized entirely for the purchase of bitcoin, and the funds will be totally exposed to the bitcoin exchange rate. By the time of publication, TASE and Silver Castle had not responded to requests for comment.

The letter from the Capital Markets Authority, according to Calcalist, focused primarily on bitcoin-related investments by the institutions in question, such as Altshuler Shaham’s $100 million investment in the Grayscale Bitcoin Trust earlier this year. It does not apply to all crypto trading.

To be clear, they are not referring to investments in cryptographic currencies or associated technologies, which have different economic logic and may even benefit the market, according to the letter. According to Calcalist, the authority will also compel institutions to give minutes of all talks and meetings in which they discussed these investments, as well as all supporting materials.

Ritika Sharma

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.