Israel

Developing Partly Confirmed

Crypto is lawful to own and trade and is treated as an asset for tax purposes. Financial-service, securities and AML rules apply, but Israel does not yet have one consolidated crypto regime comparable to MiCA.

Capital Market Authority / Israel Securities Authority

Total Laws (incl. applicable EU-wide)

Effective Laws

At a Glance

Is holding crypto allowed?

Allowed

Is crypto trading allowed?

Regulated

Is P2P trading allowed?

Allowed

Are crypto payments allowed?

Allowed

Is crypto legal tender?

Is mining allowed?

Allowed

Is staking allowed?

Regulated

Is DeFi participation allowed?

Unclear

Are stablecoins allowed or regulated?

Unclear

Activity Status Matrix

Activity	Status	Details
Holding Crypto	Allowed	Is holding crypto allowed?
Crypto Trading	Regulated	Is crypto trading allowed?
P2P Trading	Allowed	Is P2P trading allowed?
Crypto Payments	Allowed	Are crypto payments allowed?
Legal Tender	No	Is crypto legal tender?
Mining	Allowed	Is mining allowed?
Staking	Regulated	Is staking allowed?
DeFi	Unclear	Is DeFi participation allowed?
Stablecoins	Unclear	Are stablecoins allowed or regulated?
NFTs	Regulated	Are NFTs allowed or regulated?
Token Launches	Regulated	Are token launches allowed?
Crypto Advertising	Regulated	Is crypto advertising allowed?
Banking Access	Restricted	Do crypto businesses have banking access?

Regulation Overview

Israel regulates crypto through existing financial-services, securities, banking, AML and tax laws. Businesses providing custody, transfer, exchange or related financial-asset services may require a licence from the Capital Market Authority; security-token offerings can fall under Israel Securities Authority oversight. Banks apply risk-based controls to crypto-linked funds. The Tax Authority treats virtual currency as an asset rather than legal tender. Policy work and reporting infrastructure continue to develop.

Tax Information

Virtual currency is treated as an asset. Investor disposals generally create capital gains, commonly at the individual capital-gains rate, while business or professional activity is taxed as ordinary income.

Individual Tax Treatment

Individuals generally report taxable disposals and may use the Tax Authority's digital-assets reporting/payment route where normal bank transfers are difficult. Classification can change for frequent or business-like activity.

Business Tax Treatment

Businesses recognise crypto revenue and gains under normal income, corporate and VAT rules. Payroll, mining, staking and token issuance require activity-specific analysis.

Israel Tax Authority

Business & Licensing

Covered financial-asset services may require a Capital Market Authority licence. Securities offerings and investment services may require ISA approval; banking and payment activities can require additional permissions.

AML / KYC Requirements

Licensed financial-service providers must perform customer and beneficial-owner checks, source-of-funds review, transaction monitoring, sanctions screening, recordkeeping and unusual-activity reporting.

Primary Regulator

Capital Market Authority / Israel Securities Authority

gov.il

Crypto Laws & Regulations in Israel

Regulationeffective

Prohibition on Money Laundering Order applicable to credit and financial-asset service providers

Published: March 14, 2018Effective: November 14, 2021Ref: KT 7964 p.1084; KT 9267 p.2608

Israel applies customer identification, reporting, monitoring, screening and record-retention duties to credit and financial-asset service providers, including covered virtual-currency businesses.

Current state: AML/CFT order applies to licensed financial-asset service providers, including relevant virtual-currency activity

AML/KYCLicensingExchanges

Official Source

Othereffective