Yigal Arnon & Co | View firm profile
Earlier this year, the Israel Tax Authority (ITA) issued two circulars, one on the taxation of
digital tokens and the second addressing the taxation of utility tokens in initial coin offerings
(ICOs). Additionally, in March, the Israel Securities Authority (ISA) released a detailed
interim report by the Committee for the Regulation of Public Offerings of Decentralized
Cryptocurrency Coins (Report) (with a follow-up report due to come out around October
2018). Moreover, it is expected that before the end of 2018, legislation will come into force
that for the first time will see Israeli primary legislation define virtual currencies as financial
assets and mandate licensing for related services, as is later discussed in detail.
This chapter addresses the applicability of the existing legal framework in Israel to the
use and trade of virtual currencies. It further reviews the significant efforts already made by
the Israeli regulators to create new, or to adjust existing, legislation and regulations with
regard to virtual currencies in an attempt to keep pace with the bustling global virtual
currency market, and especially the booming Israeli one (an estimated US$500 million was
raised in Israeli-linked ICOs alone in 2017).