Israeli financial authorities are stepping up their efforts to regulate bitcoin-related investments: Report

According to Israeli business magazine Calcalist, Israel's Capital Market, Insurance and Savings Authority is forcing insurance firms and investment houses to explain and justify any bitcoin investments.

According to Calcalist, the authority described bitcoin as a speculative asset with no inherent value in a letter issued to banks under its supervision on Wednesday.

According to Calcalist, the letter was sent in response to (and just a day after) the Tel Aviv Stock Exchange (TASE) and digital currency investment firm Silver Castle announced the country's first bitcoin-linked bonds will trade on TASE UP, the exchange's private company trading platform.

The country's financial authorities have begun strengthening crypto rules. The Ministry of Finance proposed a measure at the end of July that would compel all crypto assets worth more than $61,000 to be disclosed to the tax authorities. According to a newly published Justice Department study, a new anti-money laundering order that includes virtual currency service providers will take effect in November. According to the Justice Department study, financial authorities, including the Capital Market Authority, were engaged in the legislation's preparation.

TASE claimed the new bonds would expose institutional investors to bitcoin “with substantially reduced operational risks and product holding costs,” according to its release.

According to the press release, “the money generated in the [issuance of the bonds] will be utilized exclusively for the purchase of bitcoin, and the funds will be completely exposed to the bitcoin exchange rate.”

By the time of publication, TASE and Silver Castle had not responded to requests for comment.

The letter from the Capital Markets Authority, according to Calcalist, focused particularly on bitcoin-related investments by the institutions in issue, such as Altshuler Shaham's $100 million investment in the Grayscale Bitcoin Trust earlier this year. It may not apply to all crypto trading.

“To be clear, we are not discussing investments in cryptographic currencies in general, nor in related technologies, which have a different economic justification and may potentially benefit the market,” the letter said.

According to Calcalist, the authority will also ask institutions to provide minutes of all conversations and meetings in which they addressed these investments, as well as any supporting documents.