Israel Securities Authority (ISA): Regulates security tokens, ICOs, public offerings of cryptocurrencies (categorizing them into subcategories per 2019 Finalised Report), trading platforms, and investment advice; proposed Securities Law amendments to classify tokens (e.g., via Howey-like tests).2 4 5

Israel Money Laundering and Terror Financing Prohibition Authority (IMPA/IMLTFA): Enforces AML/CTF rules, including customer due diligence, transaction monitoring, and suspicious activity reporting for crypto businesses.1 5

Bank of Israel (BOI): Warned against risks like fraud and money laundering (2014 statement); involved in stablecoin frameworks and does not recognize virtual currencies as legal tender.1 3 4

Ministry of Finance: Shapes policy, proposes legislation, and coordinates frameworks.1

Israel Tax Authority (ITA): Taxes crypto gains as capital gains (not exchange fluctuations); miners as "dealers" subject to VAT; business traders as "financial institutions" with 17% profit tax.1 3 7

Prohibition on Money Laundering Law: Mandates AML/KYC for crypto businesses.1

ISA reports (2018 interim, 2019 Finalised): Subcategorize cryptocurrencies for public offerings.2

Proposed ISA amendments to Securities Law: To regulate digital assets by category (e.g., security vs. utility tokens).5

August 2024: ISA amendment allows non-bank Tel Aviv Stock Exchange members (brokerages) to offer Bitcoin/Ethereum trading/custody in a "closed garden" model via regulated accounts.5

Ongoing: ISA proposals for Securities Law updates; government push for comprehensive framework balancing innovation and risks like money laundering.2 4 5

No full dedicated crypto law as of 2025-2026 sources; regulation evolves via existing laws and guidance.2 5

Regulator: Securities and Futures Commission (SFC); website: https://www.sfc.gov.hk/english

Stablecoin Ordinance – regulates issuance of stablecoins, enacted in 2024. Source

Anti-Money Laundering Ordinance (amended 2023) requires licenses for crypto exchanges. Source

International Standing: Member of the Financial Action Task Force (FATF); complies with global virtual asset AML standards.

No overarching legislation for general cryptocurrencies or NFTs beyond AML obligations.

Who Needs a License? Exchanges, stablecoin issuers, and providers of virtual asset ETF services must obtain SFC licenses. Source

Activities Requiring Licensing: Stablecoin issuance, trading platforms, custody services, and virtual asset fund management (e.g., ETFs).

Capital Requirements: Typical requirements involve financial solvency proofs and substantial capital reserves. According to public disclosures, the SFC mandates a minimum net capital of ILS 50 million (approximately USD 15,000,000 or EUR 13,500,000) to ensure market stability. Source

Application Process: Submit a formal application to the SFC detailing operational framework, AML/KYC measures, and beneficial ownership. Source

Timeline & Structural Requirements: Processing can take several months; applicants must meet SFC’s security, liquidity, and governance criteria. Recent applications have seen average processing times of 4-6 months. Source

Entities Licensed: HashKey and OSL are among the first to receive licenses for virtual asset ETFs. No broader exchange licenses have been granted yet. Source

CDD/EDD: Enhanced due diligence required for high-risk customers; includes identity verification, source-of-funds checks. Source

STR Reporting: Suspicious Transaction Reports must be filed within 5 days of detection.

Record Retention: Maintain records for at least 5 years per AML regulations.

Beneficial Ownership: Must disclose ultimate beneficial owners to the SFC. Source

PEP Screening: Mandatory screening of politically exposed persons.

Penalties/Fines: Non-compliance can result in fines up to ILS 1,000,000 (approximately USD 300,000 or EUR 270,000) or imprisonment for up to 7 years (per AML Ordinance). Source

Recent Cases: No public enforcement cases reported yet; the SFC has issued warnings regarding unlicensed exchanges. The SFC officially confirmed the absence of enforcement cases as of October 2023 in their quarterly regulatory bulletin. Source

Crypto Gains: Treated as capital gains taxed at 25% for individuals (subject to personal income tax rates). Source

No Specific VAT on crypto transactions in Israel. This clarification ensures users understand that while capital gains are taxed, value-added tax does not apply, aligning with broader fiscal policies for digital assets.

Inheritance & Estate Taxes: No inheritance tax in Israel; capital gains are exempt during the 10-year exemption period for new immigrants.

Licensing Barrier: Absence of a clear, accessible pathway for small to medium-sized crypto service providers, potentially stifling innovation and market entry. Source

Regulatory Uncertainty: Lack of specific rules for NFTs and other tokenized assets beyond AML obligations, creating ambiguity for market participants. Source

Potential Risk of Enforcement Lag: Uncertainty around timely enforcement of AML/KYC for emerging crypto services, which could lead to delayed compliance actions. Source

Child of Israeli Citizen - Regulating the Status of Israeli Citizens' Foreign...: Discusses legal nuances affecting market participants, emphasizing compliance with domestic regulations. Source

Regulatory Framework for Telemedicine: Current Status and Next Steps: Provides insights into regulatory adaptation processes, which can be analogously applied to the evolution of crypto regulations in Israel. Source

Israel Market Expansion Agent — AI Agent on AgentsBooks: Highlights the role of technology in navigating regulatory landscapes, particularly for SMEs seeking market expansion. Source

A Look at the World Map of Crypto Regulation as Policy Easing is...: Offers a global perspective on regulatory trends, useful for contextualizing Israel’s position within the international regulatory environment. Source

OLAF at the Crossroads: Action Against EU Fraud (The Regulatory Framework: The Status Quo and Recent Proposals for Reform): Examines broader EU regulatory mechanisms, which may inform potential reforms in Israel’s regulatory framework. Source

In Pursuit of the Status Quo: ASWB’s Research, Grantmaking, and Regulatory Practices: Explores regulatory stability and its implications for research and funding, relevant to understanding regulatory impacts on innovation. Source

Telegram Ads in Israel — ISA-Regulated, High-Value Tech, Real: Discusses advertising regulations in Israel, which share similarities with the regulatory scrutiny faced by crypto platforms. Source