Israel reportedly enacted new regulations regarding the cryptocurrency industry to combat illegal activities such as money laundering and terrorist financing.

Local news agency Globes reported that the Israeli government on Sunday introduced new anti-money laundering (AML) regulations that require local fintech companies and virtual currency providers (VASPs) to have an operating license.

Israel’s Securities and Markets Authority, Insurance and Savings, the country’s independent financial regulator, are currently reviewing the various VASPs that have applied for such a license.

Shlomit Wegman, director of the Money Laundering and Terrorism Financing Authority (IMPA), says the new AML rules will help the country curb the criminal use of digital assets while providing the industry with more support and legality, the Jerusalem Post reported .

“The enactment of regulations brings real progress for the Israeli economy, fintech industry and improving financial competition,” the official said.

The Israeli government has been actively working on regulations to combat illegal activities related to cryptocurrencies this year. In July, Israel’s Treasury Department proposed a law requiring residents to file a tax return for crypto purchases over $ 61,000. Previously, the Israeli Defense Minister allegedly authorized security forces to seize crypto accounts believed to be linked to the militant wing of Hamas.

Related: FATF includes DeFi in guidelines for crypto service providers

Meanwhile, Israel’s central bank is experimenting with its own digital currency. As previously reported, the Central Bank of Israel has been issuing central bank digital currency since June 2021 through a pilot test of a digital shekel.

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