Israeli Financial Regulator Shuts Down An Unlicensed Crypto Exchange, Imposes A $460k Fine
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The Israeli financial regulator recently ordered a shutdown of a crypto exchange known as Bitin, claiming that it operated without a license. The platform’s operator was also hit with a financial sanction of $460,000, or around 1.7 million shekels.
The action against the exchange was ordered by the Commissioner of Capital Markets, Insurance, and Savings (CMISA), Amit Gal. Since the order was issued, the exchange has stopped all buying and selling services on its platform, even though the platform itself remains live.
On its website, Bitin offers users to buy and sell a number of different cryptos, including Bitcoin, Ethereum, XRP, USDT, Litecoin, and USDC. Its promotional materials say that the customers would receive the best rates in Israel for buying BTC and other virtual currencies.
Contrary to this, the platform’s footer says that the site does not provide financial services, based on the translation from Hebrew.
This might be due to the Israeli law that says that crypto exchanges are obligated to obtain a license from the CMISA in order to legally operate in the country. The regulator is in charge of overseeing and regulating crypto service providers under the country’s Financial Services Supervision Law.
Bitin’s Application For A License Was Rejected
Bitin’s application for a license was rejected back in 2022. At the time, the regulator was already familiar with the platform which was involved in a prior criminal investigation, which was seemingly the reason behind the application’s rejection. But, the platform decided to keep operating in Israel anyway, thus violating the law.
The initial controversy involving the exchange emerged in February 2020, when its operator was arrested on suspicion of money laundering and tax-related crimes. Three other project participants were also arrested at the same time. However, about a year later, the operator — locally known as the “Bitcoin King of Israel” — was cleared of the money laundering charges.
He still had to pay 15 million shekels for violating reporting requirements, and the issues for the platform have not stopped since.
