Category Archives: Israel

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Binance Adds Sub-Account Features to Attract Institutional Investors

Binance Adds Sub-Accounts Features for Institutional Investors

Top cryptocurrency market shareholder by daily trading volume Binance announced today through its blog post that it is creating a sub-account support feature to help with accommodating institutional investors.

It’s widely acknowledged that there’s a growing interest from the institutional sectors in cryptocurrency and some believe that the next phase of cryptocurrency development will be facilitated by these entities.

Binance seems to be preparing itself for this expectation by adding features to improve its services. “Binance is thrilled to announce the launch of our long-anticipated sub-account feature, which brings improved managerial control and asset audit tools to institutional account holders”, the blog post reads. It further touts this development as “one step closer to a comprehensive, full-stack offering for institutional clients”.

Binance further explains that “the new sub-account feature is available to corporate users and individuals with VIP 3 tier (or higher) accounts”. That is based on the already established institutional account system.

These sub-accounts are designed to allow institutions to have flexible handling and access control to multiple trading accounts for different firms. Different account levels will be provided to these institutions and they’ll have control over each sub-accounts of the firms. According to the exchange, “the original/main account has sole control over the movement of assets… different access levels for up to 200 sub accounts”.

The blog also infers that sub-accounts are properly compartmentalized with enhanced with security features to minimize risks of tampering. More so, the accounts have unique APIs with different access privileges.

The perceived coming influx of institutional investments has prompted similar service providers to adjust their operations to accommodate these significant changes when they happen. About a week ago, Coinbase launched over-the-counter (OTC) trading for institutional clientsIn Israel, an investment house plans to launch the first dedicated digital coin investment platform for institutional and accredited investors.


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Israeli Investment House Silver Castle Defies Market to Attract Institutional Investors

An Israel-based investment house has announced plans to cement its hold as a DLT driver in the country by launching the first dedicated digital coin investment platform for institutional and accredited investors.

Silver Castle Ltd has ignored the current bear market with this decision, with its CEO Eli Mizroch confirming that the company had spent the best part of a year creating a strong foundation for managing institutional grade-level investments.

It was only last week that KMPG called for “more participation from the broader financial services ecosystem to help drive trust and scale for the tokenized economy and help the crypto market grow and mature”. Silver Castle’s move is clearly aimed at capturing this market.

Mizroch described the launching of two funds as “awesome for everybody”; it has a target of USD 50 million by the end of this year. The first fund is described as being driven by both long and short momentum, based on an algorithmic trading device which will pick the five biggest coins by market cap. Mizroch claims that the system has been utilized in house for the past year, yielding “high double-digit” returns.

The second of the two funds offers a basket of the top 10 coins, again the result of a weighted algorithm, with further plans to launch a token-based fund for ICO investment purposes, also scheduled for the end of the year.

The company includes Zvi Ziv, a former chief executive officer of Bank Hapoalim Ltd, Israel’s largest bank by assets; and Gabriella Ravid, founder and former CEO of Psagot Ofek Investment House, the country’s largest investment fund. Ziv is insistent on the company following the blockchain trial, arguing that:

“There is a lot of potential in using blockchain and everything is going to try and move there… I believe herein lies the biggest potential in the financial world.”

Silver Castle’s CEO agrees, suggesting that blockchain is the future of investment infrastructure, with Israeli Blockchain Association’s (IBA) founding partner, Gadi Isaev, hailing the launch as a landmark event for the whole Israeli cryptocurrency market. Roma Gold, another founding partner of the IBA, commented that ICOs are becoming less popular, but institutional investment in blockchain is very much on the rise:

The Israeli blockchain ecosystem is presently experiencing both a boost and a transformation… Today, fewer startup founders are coming out of morally questionable markets, such as binary options, and gambling. Instead, more institutional players are starting to enter the market. In essence, the market is going through self-purification.”


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Switzerland, Israel Share Blockchain Regulatory Experiences

Switzerland and Israel have agreed to share their experiences in regulating the blockchain industry as part of a deal that will open up access to Swiss banks in Israel.

Negotiating terms

During a trip to the middle eastern country, Switzerland’s Minister of Finance Ueli Maurer and State Secretary for International Financial Matters Joerg Gasser discussed terms for entering the Israeli market with high-ranking state officials.

Part of the terms of this agreement concluded that both sides would cooperate with each other in areas of financial technology regulation and cryptocurrencies, as well as both parties sharing their history of success and failures in regulating the blockchain industry.

With significant financial stakes on the line for both parties, cryptocurrency and blockchain making it onto the agenda highlight how critical these emerging fields are becoming in everyday politics.

Gasser told Reuters that Switzerland should have a blockchain report outlining policy recommendations ready for Israel by the end of the year, estimating that it will take until early 2020 for the new legislation to go into effect. He said, “We need market access and each other’s markets unfettered and as free as possible.”

While Israel allows EU banks access to the country’s markets, Switzerland is not a member of the bloc and follows different fiscal policy.

Blockchain in Israel

Israel has several blockchain-related projects on the horizon, and it makes practical sense that the country would be looking into how and where regulating the industry works from a state with far more experience such as Switzerland.

As Israel is a leading expert in drones, it is perhaps unsurprising that one of the country’s biggest blockchain innovations is in this area. A startup called Applied Blockchain founded by Adi Ben-Ari has developed the Blockchain drone registry to track and secure commercial drone flights and deliveries.


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Bitcoin Eases Cross-Border Transactions for Palestinians in Gaza

Bitcoin is currently serving an important role in Gaza to help investors gain access to markets abroad and send money overseas.

Currently, Palestinians are unable to get their Israeli shekels or other currencies used in the area, such US dollars or Jordanian dinars, to online exchanges as they don’t work with local banks. This has given rise to many unofficial exchanges around the city.

The territories of Gaza and the West Bank are separated from each other by Israeli territory. Both fell under the jurisdiction of the Palestinian Authority but Gaza has since June 2007 been governed by Hamas, a Palestinian Islamic organization which came to power in free elections in 2006. It has been placed under an Israeli and US-led international economic and political boycott from that time onwards.

There are reportedly now 20 unaccredited exchanges helping local cryptocurrency users to get their money abroad to make investments that otherwise they would have no chance of making in the region. In Gaza, Mohammed runs his own unofficial crypto exchange and suggests that over the course of four years, he’s enabled up to 50 Palestinian families to buy an average of USD 500 worth of Bitcoin a month to use abroad or shop online. He maintains that his clients view Bitcoin as “cheaper, safer, and quicker”, maintaining that “nothing works with Palestinian banks” and that “Bitcoin wallets are alternative banks”.

Palestinians have adopted peer-to-peer payments are seen as another way of getting around local restrictions. Palestinians are under enormous pressure in Gaza and, due to Israel’s world status, international pressure often means that those sending money from the West have been known to have their accounts closed.

Laith Kassis, CEO of Techno Park on the West Bank, illustrated the problem for many wishing to get money overseas: “There is no payment gateway, like PayPal, for entrepreneurs to receive payments internationally… So here come solutions on blockchain with private nodes.”

The lack of power is another local issue that Palestinians struggle with as frequent outages equates to no access to the internet, making any kind of transfer of funds next to impossible.

However, Bitcoin enthusiast and professor of economics at the Lebanese American University, Saifdean Ammous doesn’t see Bitcoin or crypto in general as a solution to the failing Palestinian economy. He argues:

“If the people who want to do the transaction don’t both have balances in Bitcoin then you’re just adding extra layers of conversion from their home currency to Bitcoin and back to the home currency… That’s never going to be a sustainable solution.”

The World Bank estimates that 20% of Palestinians live below the poverty line of less than USD 5.50 a day. In this volatile highly-controlled environment, cash is the most highly sought-after payment for day-to-day necessities.


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Israeli Arrested for Attempted $50M Crypto Sale of ‘Pegasus’ Spy Software

An Israeli man was indicted by the Tel-Aviv District Court on 5 July 2018 for trying to sell top-secret spy software called Pegasus built for Israel’s government. The extremely sophisticated software gained notoriety for being able to hack into Apple iPhones.

The man worked as a senior programmer for NSO Group, which gave him access to all the company’s source code and tools. He tried to sell Pegasus for USD 50 million of cryptocurrencies on the darknet, wanting the deal to be separated into various cryptocurrencies to obfuscate his trail.

The Israeli was fired by NSO Group in February 2018 for connecting an external drive to company computers, after searching on the internet how to connect an external drive without being detected. He downloaded hundreds of millions of dollars worth of software and then hid the external drive under his bed.

Sometime later, he went to the darknet to find a buyer for Pegasus. The person contacted became suspicious of the deal and contacted NSO Group, after which point the contact cooperated to get the Israeli man arrested. The seller man was charged with theft, trying to damage property in a way that would hurt national security, marketing defense material without a permit, and interfering with computer material.

The Israeli man is being kept in custody throughout the court proceedings since he is considered a danger to national security. According to NSO Group, no top-secret data was leaked due to this incident.

The company said, “The company was able to quickly identify the breach, collect evidence, identify the perpetrator, and share its findings with the relevant authorities. The authorities, in turn, responded quickly and effectively, so that within a very short time the former employee was arrested and the stolen property was secured. No [intellectual property] or company materials have been shared with any 3rd party or otherwise leaked, and no customer data or information was compromised.”


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Czech Investor Puts $100M Into Israeli Blockchain Startups

Czech investment banking firm Benson Oak has launched Benson Oak Ventures and will be investing in Israeli blockchain startups. So far, it has raised USD 25 million but is expected to raise and invest USD 100 million.

Benson Oak has raised USD 5 billion worldwide and has always had a strong focus on technology startups. Benson Oak believes that blockchain technology is the future. Its website says, “The emerging Web 3.0 landscape, undergirded by blockchain infrastructure, is engendering a new wave of disruption and will unleash the platforms and brands of the future. We seek to invest in these platforms and brands of the future, supporting products and marketplaces that have stickiness built in and can scale rapidly with digital marketing efforts without operational growth bottlenecks.”

The website further states that Benson Oak Ventures will use its experience to develop a strong brand and market it, while connecting blockchain and decentralized products with consumers.

Managing Partner Robert Cohen says, “I believe that there are great entrepreneurs in Israel who are leading the platforms of the future, with creating and disruptive use of blockchain technologies. I moved to Israel six years ago, and with a passion to build companies, I have established Benson Oak Ventures as a new platform to provide financial and operational capital to the best entrepreneurs in Israel and around the world.”

This news is another sign that institutional investors are jumping into the cryptocurrency markets, which could open up a tremendous amount of capital, spurring rapid blockchain technology development and a cryptocurrency rally. Recently, Galaxy Digital said it was investing hundreds of millions of dollars into blockchain startups, and Andreessen Horowitz said it was investing USD 300 million into blockchain and crypto companies.


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Major Israeli Exchange to Pass on Client Crypto Details to Tax Office

A local Israeli cryptocurrency exchange has agreed to pass on client information to tax authorities as part of a government drive to tighten cryptocurrency regulations, according to local Israeli news source Calcalist.

Major Israeli crypto exchange Bits of Gold will pass on details relating to large cryptocurrency deposits over $50,000 total in the last 12 months. The move by the government is reported to be aimed at reducing money laundering through crypto exchanges

Israel’s Prohibition on Money Laundering Law has required withdrawals and deposits over NIS 50,00 ($14,700 at time of press) be reported to the country’s Money Laundering and Terror Financing Prohibition Authority (IMPA) with verification required from investors regarding the legality of deposits made. Taxation on cryptocurrency trading profits has recently been set at 25% with exchanges paying 17% VAT

Privacy laws are clearly being tightened as in the past courts have often backed citizen’s rights to privacy in financial matters concerning tax details. Bits of Gold had recently been audited although it’s been reported that the tax authorities were seeking information regarding large investors who had used the company.

Authorities still regard digital currencies with a degree of suspicion, despite better consumer protection and increasing global regulation of the space. Earlier this year Israel’s finance minister Moshe Kahlon signed a draft legislation which has been introduced to combat cryptocurrency money laundering in the country. The money laundering legislation, which is an addition to an existing law, will now include digital currency for the first time.

There have been frequent cases with many of Israel’s banks refusing to accept cryptocurrency-related money, and on two occasions banks were forced to accept the money after being taken to court. Earlier in the year Israel’s largest bank, Bank Hapoalim, was found to have unlawfully blocked a money transfer of USD 195,00 coming from a European cryptocurrency exchange platform, citing unsubstantiated claims of suspected money laundering and terrorist financing.

An IMPA draft bill from May of this year has stipulated that, if passed, financial entities will be required to keep 5 years-worth of trading records on each client including their IP addresses, according to

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Israeli Cryptocurrency Regulator Proposes In-Depth Reporting Laws

The Israeli cryptocurrency regulator published a discussion paper in May 2018 that outlines rules for cryptocurrency reporting that are extremely in-depth, and could be used as an example for the rest of the world to properly regulate cryptocurrency so that it can become mainstream.

In July 2016, the Israeli Knesset passed the supervision of financial services law that created a regulator for non-institutional currencies, which includes cryptocurrency. This law was developed so services that deal with or exchange cryptocurrencies would be licensed, supervised, regulated, and stable so that the public would be protected when using these services. In October 2018, the law will come into full effect and the regulator will begin enforcing the transfer, custody, exchange, and management of cryptocurrencies.

The new rules for cryptocurrency reporting in the May 2018 paper could be passed by the Knesset before the end of 2018, and they provide a comprehensive and in-depth approach for identifying cryptocurrency users. Like most other governments in the world, the Israeli regulator calls for recording the name, address, and ID of cryptocurrency users, but additionally wants IP addresses and cryptocurrency addresses to be reported.

Anonymity-focused cryptocurrencies like Monero, Zcash, and Verge will require additional reporting to ensure proper identification and tracking. The use of VPNs and Tor to mask IP addresses will also be tracked and reported. Additionally, if cryptocurrency is sent to a mixer or a darknet market, that will be reported, hinting that Israel will integrate cryptocurrency tracing technology into its laws. These laws go further than ever to tackle cryptocurrency money laundering, and the rest of the world may follow Israel’s lead.

Bitcoin and cryptocurrency were built in the spirit of privacy and decentralization but Israel’s proposed regulations would seem to counter this. While cryptocurrency users may react negatively to this, it would be a positive step towards cryptocurrency becoming widely adopted in Israel.

Once these laws are in place, banks and other financial institutions will have clarity in facilitating the fiat side of cryptocurrency transactions, since they will know that cryptocurrency trading is legal when they follow these procedures to prevent money laundering.


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Africa and the Middle East: Crypto and Blockchain News Roundup, 1st to 7th June 2018

Africa and the Middle East

Welcome to our weekly roundup of all important blockchain and cryptocurrency news from around the world. Follow the latest developments in the cryptocurrency space continent by continent, country by country.


African Union

Africa has potential to become next frontier in crypto: According to a report by Economist Nigeria, Africa is in line to become the next cryptocurrency hub in the world. Economists believe that the technology has the ability to cause disruption in fintech circles because it is not bound by geography and records transactions in real time.

African countries with especially high inflation rates are among the places where cryptocurrencies are becoming increasingly popular as they have the ability to combat the crushing inflation despite being volatile themselves.

According to Tech journalist Mukesh Sharma, “Africa is rarely mentioned among the largest markets for cryptocurrency, but it may be set to steal a march over other markets.”

Mobile phone users that will increase to around 725 million subscribers by 2020 will present more and opportunities for cryptocurrencies to succeed. African governments themselves are in favor of blockchain technology as it will attract vital foreign investment and innovative development in the region. More than 15 cryptocurrency startups have taken root in the continent since the year’s start too. Mining, trading and ICOs are becoming more and more popular as well.


High Court reverses crypto ban: In a surprise move, the central bank of Zimbabwe lost its case against banning cryptocurrency exchange trading as the local high court ruled in favor of exchange Golix that filed the application, according to latest reports.

What’s surprising is that the Central Bank’s legal team failed to show up in court and thus the court had no choice but to award the case to Golix. The move was welcomed in Zimbabwe as many people there are now investing in cryptocurrencies to elude the hyperinflation that is rampant in the country. The Reserve Bank is already one of the least popular government institutions in the country.

No one from the central bank was available for comment.


Egyptian Grand Mufti against Bitcoin: According to latest reports from Egypt, the Grand Mufti has declared that Bitcoin and other cryptocurrencies are against the principles of Islamic currency. The move comes after the mufti traded barbs with the imam of a local UK mosque that started accepting cryptocurrency donations.

The issue of Bitcoin is not yet resolved by the Muslim clergy but now more and more people are open to the idea of cryptocurrencies and their usefulness.

South Africa

Central Bank developing blockchain-based internal tokens payment: The South African Central Bank (SARB) is working on a proof-of-concept based interbank payment system that uses an Ethereum-based fiat token, according to latest reports from Cointelegraph.

The project Khokha as it is called has been entailed in the latest report by SARB. It says:

“The aim is to build a proof-of-concept (PoC) wholesale payment system for interbank settlement using a South African Rand token on distributed ledger technology (DLT), while also investigating interconnected issues such as the platform’s scalability, resilience, confidentiality, and finality.”

Blockchain startup ConsenSys has joined in with seven partnering banks to form a trial team for the new blockchain payment system. PricewaterhouseCoopers Inc (PwC) has also joined in as a support partner.

Crypto miners may be targeting South African computers: South African computer users could be the latest victims of crypto jacking according to latest reports of African newspaper The New Age that used visiting computers’ computing power to mine cryptocurrencies.

A shady code was unveiled by a tech-savvy visitor to the website who noticed that his system slowed down a lot upon visiting the website. Upon investigation, it was found that a crypto mining script had been inserted into the website’s code to mine Monero, a popular cryptocurrency focused on privacy.

The newspaper has denied adding the code and could face investigation.


President promotes blockchain technology: President of Uganda Yoweria Kugata Museveni has made encouraging statements regarding the future development of blockchain technology. He made the remarks at the first Africa Blockchain Conference held in Kampala, Uganda this week.

President Museveni welcomed the technology to increase transparency in the monetary system of Africa and the world. He spoke at length about how businesses had become used to “secrets and deceit” and that blockchain provided a solution. He said he strongly believed that blockchain technology could streamline the goods and services across his country but also cautioned against complete breakdown of current infrastructure.

The Middle East


8 Israelis arrested in Philippines for crypto scam: Eight Israelis and 480 local Filipino residents have been arrested in a possible Bitcoin scam in the Philippines, according to latest reports from the Pacific nation. The group was reportedly involved in fraudulent activities amounting to millions of dollars.

The local police undertook these raids following tip-offs by people within the crypto community. According to the police, the Israelis were involved in supervision of the scam and they had defrauded citizens of New Zealand, Russia, Australia and South Africa who thought they were investing in cryptocurrencies.

Public outraged by crypto regulation crisis: A regulatory impasse is creating problems in Israel according to latest reports coming from the Middle Eastern country. The country is facing protests from the crypto community that claim they have been promised legislation.

Due to the said delay in regulating the space, the individuals and businesses operating in the country will continue to face massive issues in cashing out cryptocurrency deposits from local banks. The government cited money laundering fears as the reason behind the delay in the key legislation and has so far failed to make a breakthrough.


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Israel’s New AML Laws Add Clarity for Crypto Investors

Israel’s finance minister Moshe Kahlon has signed draft legislation which has been introduced to combat cryptocurrency money laundering in the Middle Eastern state, writes Israeli business source Globes.

The new draft notice is an addition to an existing law, due to be introduced into legislation in June of this year. The money laundering legislation will now include digital currency for the first time and explains:

“The definition of a service in connection with financial assets is being expanded beyond currency services, to includes all activities and services performed by a business in connection with financial assets that does not include credit.”

The digital currency assets are described as “financial services other than tangible assets or standard financial means, in a field that has been developing in recent years”, referring quite clearly to cryptocurrencies.

Manny Rosenfeld, head of the Israel Bitcoin Association, was optimistic about the new draft explaining that such new regulations will add a much-needed degree of certainty into Israel’s crypto space and was impressed how quickly the government has responded to their request for changes several weeks ago:

“The new order will give certainty for those involved in the field, and will define rules that are permitted and forbidden, which will enable banks and financial institutions to know who is compliant with the law, and whose money they can safely receive.”

This is the second fast reaction this year by the Israel Anti-Money Laundering Authority. An earlier case this year initiated by tech company Bits of Gold won its application for clearer legal definition, although the company’s risk manager, Yal Naaman, was dismayed that the government agency was unable to specify in its description reference to biometric face recognition. However, Naaman was pleased with the new law:

“The Israel Anti-Money Laundering Authority has acted quickly and we hope that its move will bring order to the market. This would enable the identification of a customer without requiring physical access. We call on the authority to add this to the final order.”

There have been frequent cases many of Israel’s banks refusing to accept cryptocurrency-related money, and on two occasions banks were forced to accept the money after being taken to court. earlier in the year Israel’s largest bank, Bank Hapoalim, was found to have unlawfully blocked a money transfer of USD 195,00 coming from a European cryptocurrency exchange platform, citing unsubstantiated claims of suspected money laundering and terrorist financing.


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