As of June 1, the first law regulating cryptocurrency exchanges in Israel was said to take effect. Finance Committee of the Knesset postponed Israeli Cryptocurrency Regulation introduction for at least four months. This is reported by Cryptovest with reference to Jacob Enoch, head of M&A at M. Firon & Co. and Co-chair of the Israel Bar Association’s committee on Blockchain and Cryptocurrency.
According to lawmakers, the reason for this decision is insufficient development of a strategy for combating money laundering through digital currencies.
As Jacob Enoch said in his interview with Cryptovest, regulating agencies and institutional organizations are interested in delaying the entry into force of the law. They are afraid of competition from the financial companies that will enter the market and will get licenses to work with financial assets.
“The reason for the delay is the lack of a prohibition on money laundering, which implies that these companies have not been mindful of, and have not acted to prevent, money laundering to this day. This is something that is not acceptable to say about an entire market.”
“There is no doubt that the beneficiaries of the postponement of the law are the institutional bodies, which fear the competition that will be created with the entry of fintech companies licensed for services in financial assets. I am concerned that instability in such important decisions could lead to stagnation in existing fintech companies and delay the start of new companies with innovative financial solutions. Even worse, this creates antagonism among fintech investors in Israel, which could snowball into a loss of trust.”
This postponement means that the Israeli cryptocurrency market continues to operate without any formal regulation.
Jacob Enoch is also confident that postponement of Israeli cryptocurrency regulation can lead to decline of the development of financial companies and postpone the launching of new start-ups aimed at creating innovative financial solutions.