The finance committee of Israel’s parliament, the Knesset, called a special meeting on Wednesday to discuss the postponement of a proposed law intended to regulate crypto currency exchanges.
Initially, the law was supposed to be put before Israeli deputies on June 1st, but the date has now been pushed back by four months; this is according to revelations made by Jacob Enoch, co-chair of the Israel Bar Association (IBA) in an email to Cryptovest.
The surprising postponement leaves financial services providers and Israeli companies without any regulation for crypto currency exchanges.
In the email, Enoch, who co-chairs IBA’s committee on block chain and cryptocurrencies said, “The reason for the delay is the lack of a prohibition on money laundering, which implies that these companies have not been mindful of, and have not acted to prevent, money laundering to this day. This is something that is not acceptable to say about an entire market.”
Writing further, Enoch said, “There is no doubt that the beneficiaries of the postponement of the law are the institutional bodies, which fear the competition that will be created with the entry of FinTech companies licensed for services in financial assets. I am concerned that instability in such important decisions could lead to stagnation in existing FinTech companies and delay the start of new companies with innovative financial solutions. Even worse, this creates antagonism among FinTech investors in Israel, which could snowball into a loss of trust.”
For Enoch, the decision made on the 11th hour to delay the enactment of the new law is comical. The move will benefit the large financial institutions without a doubt which fears the competition arising as a result of the entry of regulated FinTech companies in the sector.
“One can only hope, that such inevitable antagonism among FinTech investors will not snowball into a potential loss of trust,” he added.
In the past week, the Israeli finance ministry published the draft Money Laundering prohibition Order relating to financial services in digital currencies in a move to bolster the legal framework in the crypto currency space. The new legislation on cryptocurrency exchanges was meant to carve out the guidelines that were to allow cryptos such as Bitcoin and Ether and even institutional banks to enter the Israeli crypto market space.