Crypto Trap

Banks in Israel refuse to accept money invested on crypto exchanges, due to money laundering concerns. At the same time, the tax authority is demanding that Israelis who invest in crypto pay capital gains tax. If you cannot transfer the funds you cannot pay the tax.

The trend of the large crypto currencies has led masses of investors, even in Israel, to believe that they can get rich quick. For some, this has also worked, but when they realize the profits, they find that the Israeli authorities have put them in a trap, with no way out.

This situation was created by a lethal combination between a legal buyer and a lack of coordination between regulators. In the case of the crypto, this combination also turns thousands of Israelis into potential tax evaders and criminals and also causes a loss of state income that already reaches at least NIS 200 - 300 million - a huge sum, especially at a time when the deficit was cut and not stopped.

The root of the problem is the refusal of Israeli banks to receive money invested on currencies in the world, due to the fear of money laundering - although in many cases the money path can be easily shown and disproved. On the other hand, the tax authority, which receives information from Israeli stock exchanges from Israeli stock exchanges, requires them to pay for their capital gains, along with a voluntary disclosure process.

Naturally, if the funds cannot be transferred, the tax cannot be paid, and the voluntary disclosure process cannot be started.

Source: https://www.calcalist.co.il/local/articles/0,7340,L-3767322,00.html