Israel and cryptocurrencies: a controversial relationship

What happens in Israel to proponents of cryptoeconomics? The popular newspaper asked for it Haaretz  in a long and articulated service, in the course of which he proceeded to report with a wealth of details a series of quite sensational distortions which they are making life extremely difficult for those who have decided to put Bitcoin in their wallet and other virtual currencies, perhaps thinking of exploiting the opportunities offered by a sector which is increasingly configured as a valid alternative for investors determined to take risks, in order to make their money bear fruit.

The issue of taxation

Bitcoin, and of course virtual currencies as a whole, is not recognized by Israel as a currency instrument. Nevertheless, those who trade in BTC or other digital assets are obliged to pay 25% tax on capital gains to the tax authorities, where the trader is a natural person, a percentage that even rises to 47% in the case of corporate entities. In practice, investors are forced to pay taxes on an asset that does not officially exist. A modus operandi such as to arouse considerable perplexity, especially when it then joins the one carried out by the country's banks.

Banks do not accept money transfers from exchanges

Haaretz, in his article, also makes it known how citizens who have invested in cryptocurrencies are practically facing a sort of embargo on the part of the banking system. In fact, the institutions refuse to accept money transfers from the main ones exchange, an obstructionist behavior justified in particular by the risk of money laundering and by the fear that it is capital destined to finance terrorism, a topic that is always felt in Israeli society.

The most serious aspect of what is happening is the practical impossibility on the part of those taxpayers who have declared their capital gains to the taxman to pay taxes. In this way, these people risk having their accounts and properties confiscated in order to settle the tax debt balance. This is a problem of considerable size, considered as, according to Haaretz, it would amount to a good deal 85 million dollars the amount of money owed by the Israeli traders on the capital gains generated in the sale of BTC and Altcoin. Figures that have been correctly reported, but which at the same time cannot be settled regularly in order to close the dispute.

A behavior already sanctioned by the courts

To make the behavior of the Israeli banks even more controversial, the judgments already issued in courtrooms. In fact, many investors, faced with the reticence of banking institutions, have decided to sue them and two of them have already won, with the sentences now finalized.
A further surprise is precisely the fact that the sentenced banks did not apply the sentences, so as to raise a precise suspicion in observers: the institutions, in practice, would persist in their attitude believing that to pay a fine, if it were actually raised would be a totally acceptable cost in order to avoid the institutional recognition of cryptocurrencies.