“Israel is significantly behind schedule”: Crypto industry calls for sweeping regulatory reform

Israel’s crypto industry is at a crossroads. While the United States is moving to provide clearer rules for digital assets, Israeli companies still face regulatory, banking and tax barriers that are pushing entrepreneurs and talent abroad. Nir Hirschmann, CEO of the Crypto Companies Forum, argues that Israel risks losing a fast-growing industry unless it moves quickly to close the gap.

In recent months we have seen a regulatory blitz by the Capital Market, Insurance and Savings Authority and the Bank of Israel to advance regulation of the industry. Are we in a good place?

“The steps are welcome, but Israel is significantly behind schedule. In the US, regulators openly say that their policy goal is to provide regulatory certainty and bring entrepreneurs back to the country. They have connected licensed crypto exchanges to the federal clearing system, exempted self-managed wallets from broker regulation and enacted legislation allowing companies to buy US government bonds.

“In Israel, crypto companies still face difficulties opening bank accounts and receiving funds. In taxation, employees can face double taxation on options, while foreign investors are exposed to the risk of double taxation. As a result, Israeli entrepreneurs are establishing successful companies abroad. When the US offers a stable business environment and clear regulation, entrepreneurs prefer to operate there.”