The Israeli financial regulatory authority has taken decisive action by ordering the immediate shutdown of the cryptocurrency exchange known as Bitin, which was found to be operating without a proper license. In conjunction with this closure, the operator of this platform faces significant financial penalties amounting to approximately 1.7 million shekels (around US$460,000).
The decision to shut down Bitin was enacted under an official directive from Amit Gal, the Commissioner of Capital Markets, Insurance, and Savings. Despite the website of Bitin still being online, it has been confirmed that the functionalities for buying and selling cryptocurrencies on the platform have ceased.
Bitin offered transactions in various cryptocurrencies including Bitcoin, Ethereum, Litecoin, Ripple, USDT, and USDC. The site had advertised attractive rates for customers purchasing Bitcoin and other digital currencies. However, it also included a disclaimer indicating that it does not provide financial services, which raises questions regarding its operations.
Under Israeli law, specifically the Financial Services Supervision Law, cryptocurrency exchanges are required to acquire a license from the relevant regulatory body, the Israeli Capital Markets, Insurance, and Savings Authority (CMISA). The regulation serves to ensure that cryptocurrency service providers comply with legal standards and protect consumers.
The regulator’s decision stems from Bitin’s application for a license being denied in 2022 due to the operator’s past involvement in criminal investigations. Despite having been rejected for a license, the operator persisted in offering trading services for digital currencies, defying local regulations.
Prior to this scenario, the exchange operator had been arrested in February 2020 on allegations related to tax offenses and money laundering, alongside three other individuals associated with the project. A year later, while the operator was exonerated of money laundering charges, he was still penalized with fines totaling 15 million shekels due to breaches of reporting laws.
Additionally, earlier this year the Israeli Securities Authority (ISA), responsible for regulating the financial market in Israel, issued a warning against a binary options trading platform called Pocket Option. The ISA has historically prohibited the promotion and sale of binary options in response to numerous scams and fraudulent activities observed in that sector. Following widespread misuse, legislation was enacted to halt the marketing and distribution of binary options in Israel as of March 2016. Further restrictions were established in October 2017, leading to the ban on international marketing of binary options by Israeli entities.
Overall, the clampdown on Bitin highlights the increasing vigilance of Israeli regulators in the cryptocurrency landscape, ensuring that entities adhere to legal frameworks designed to protect investors and uphold market integrity.