State of Cryptocurrency Regulations Part 13: What Israel is Doing With Cryptocurrencies

Israel has a very special place in the world of technology. The Startup Nation is unsurprisingly home to some of the best cryptocurrency startups, so it also becomes an important nation to study if one wants to understand the global regulatory scenario of cryptocurrencies. So in this article we’re going to …
Israel
Tel Aviv, Israel

Israel has a very special place in the world of technology. The Startup Nation is unsurprisingly home to some of the best cryptocurrency startups, so it also becomes an important nation to study if one wants to understand the global regulatory scenario of cryptocurrencies. So in this article we’re going to do that. Let’s get stated:

Current Legal Status of Cryptocurrencies in Israel

Cryptocurrencies are legal in Israel for payments and trading both, but doing the former is not an easy job because country’s law doesn’t recognize them as ‘currencies’. Instead, Bitcoin and all other cryptos are treated as “assets” under Israeli law, which makes using them as means of payment more difficult. If any Israeli businesses receive payments in cryptocurrencies, they can’t report those transactions in their account books as ‘payment received’ transactions. Instead, those transaction will have to be reported as barter transactions, which would require extra paperwork.

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Now as far as trading of cryptocurrencies is concerned, it’s permitted but with a steep price tag. Traders are required to pay 25% capital gains tax every time when they sell their crypto assets. Miners, businesses involved in cryptocurrency trading or individual traders who trade cryptocurrencies on a regular basis, on the other hand, are required to report profits and losses just like any normal business and pay Corporate Income Tax on their income. They also need to pay VAT at the rate of 17%.

Cryptocurrency Regulation in Israel: Recent Developments

Israeli cryptocurrency regulation story stared from December last year when country’s stock market regulator announced that it’s planning to de-list cryptocurrency companies from Tel Aviv Stock Exchange. Critical decisions related to cryptocurrency regulation followed the announcement in order given below:

  • In January Bank of Israel (the central bank of country) announced that cryptocurrencies are assets, not currencies.
  • Soon Israel’s tax authority also echoed the words of Central bank and confirmed that Bitcoin and other cryptocurrencies will be taxed as assetsinstead of currencies. Within five days country also started drafting the taxation rules for cryptocurrencies.
  • In February Israeli Tax Authority (ITA) revealed about the taxation rules officially for the first time, reiterating the factthat cryptocurrencies will be taxed just like any other assets at capital gains tax rate of 25% while businesses would be subject to marginal rate of 47%. The authority also instructed investors to report their holdings within 30 days and arrange for prepayment of taxes.
  • Finally, more clarification about the status of cryptocurrencies was provided by Israel Securities Authority (ISA) last month. ISA made it clearthat asset classification of cryptocurrencies doesn’t mean that they will be treated as securities. Instead, they’ll be considered “properties” unless they’re controlled by a centralized entity and are developed for the purpose of investment alone. Any cryptocurrency that is decentralized and has been developed for the purpose of consumption will not be considered a security, ISA said. Therefore, it became clear that according to Israeli law Bitcoin is a property instead of security.

Fortunately, Israeli legal authorities are also quite supportive of cryptocurrency companies as long as they don’t do anything illegal. In February country’s Supreme Court stopped Leumi Bank, one of the largest banks in Israel, from closing the account of a cryptocurrency exchange.

Future of Cryptocurrency Regulation in Israel

Since Israel has just announced its cryptocurrency taxation rules without any complicated regulatory mess, we can expect things to remain so in near future. In the long term they may also introduce a complete regulatory framework for cryptocurrencies as other countries are doing, but that will take some time. So for now Israeli regulatory climate is pretty stable and positive as long as you keep paying the hefty taxes.

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Venture Captalists Pour $133 Million into Stablecoin Startup

I am excited to announce today that Basis (formerly Basecoin) has raised $133M in a private placement from Bain Capital Ventures, GV, Stanley Druckenmiller, Kevin Warsh, Lightspeed, Foundation Capital, Andreessen Horowitz, Wing VC, NFX, Valor Capital, Zhenfund, INBlockchain, Ceyuan Ventures, …
· April 20, 2018 · 2:30 am

ICOs and cryptocurrency startups have been slumping recently due to the bearish signs which were seen in the first quarter of 2018. However, Basis, a promising start-up, has broken that trend by raising over $133 Million U.S. in private funding.


A cryptocurrency startup by the name of Basis (formerly named Basecoin), has just announced that they have raised over $133 Million dollars in funding from well-known venture capitalist firms.

Three Princeton grads just got $133 million from Silicon Valley’s hottest investors for a cryptocurrency that could actually replace money https://t.co/bGrEmadqF3pic.twitter.com/sCiOk3CMpU

— Business Insider (@businessinsider) April 18, 2018

These firms include GV (Google Ventures), Andreessen Horowitz and Sky Capital just to name a few.

Nader Al-Naji, the CEO, and co-founder of Basis, announced on Medium:

I am excited to announce today that Basis (formerly Basecoin) has raised $133M in a private placement from Bain Capital Ventures, GV, Stanley Druckenmiller, Kevin Warsh, Lightspeed, Foundation Capital, Andreessen Horowitz, Wing VC, NFX, Valor Capital, Zhenfund, INBlockchain, Ceyuan Ventures, Sky9 Capital, and many more.

However, reports indicate that Basis started their funding campaign as early as 2017, when cryptocurrencies really began to hit the mainstream.

Basis was founded by three Princeton graduates in hopes of creating a stablecoin which would help to bring stability to the cryptocurrency market.

A common theme seen with cryptocurrencies is their volatility and unpredictable price actions. This has created an environment where more conservative investors are wary of investing due to the higher levels of risk in comparison to stocks or bonds.

cryptocurrency investing

Compared to traditional equity markets, the cryptocurrency market often experiences higher levels of volatility, with 5 percent days being commonplace.

Al-Naji put it best:

The price volatility of cryptocurrencies is one of their biggest barriers to widespread adoption,

Surveys have found that one of the primary reasons why investors are unwilling to put money on the cryptocurrency space, is due to the high risk which they are known for. Since the start of 2017, Bitcoin has gone from $1000 to $20,000 and everywhere in between. Before mainstream adoption arrives, it makes sense that the cryptocurrency market will need to stabilize and find a solid ground as to become more appealing to traditional investors.

By introducing the Basis stablecoin, the Basis team hopes to create an environment where people are actually willing to spend cryptocurrencies instead of trading or ‘HODL’ing them as a store of value.

Basis plans on doing this by creating an algorithm based ‘central bank’ which would allow the value of the currency to inflate and deflate “just like a real currency.”

At the moment, it is unclear exactly how exactly they plan to accomplish this. Although seeing that they have support from leading VC funds, there is a high likelihood that they have promising prototypes which have impressed the eyes of investors.

But What Are Stablecoins?

Stablecoins are cryptocurrencies that use certain on-chain applications to help emulate prices of values that are not specific to the cryptocurrency market. Tether, the most prominent cryptocurrency by market-cap, links their token to the U.S. dollar, with the cryptocurrency trading at just around $1.00 U.S. at all times.

But What Are Stablecoins?

However, stablecoins can also be linked to other values, with some projects looking into linking the price of their stablecoin to gold and a variety of other assets.

The only requirement for stablecoins is that they are linked to a relatively stable asset, something that is often highly liquid and widely accepted. However, there was some news earlier this month, with a new cryptocurrency looking to be linked to Habanero peppers, this being a rare exception to the prior rule.

Stablecoins and their respective companies hope to provide the benefits of the transparent and decentralized blockchain while still holding value with a stable, digital asset.

Unlike, Tether, who has been under fire due to transparency issues, Basis hopes to become the future of stablecoins, which will help propel them to become a larger financial player, in the ever-growing cryptocurrency space. Despite this previous goal, Basis hopes to go even further by reaching beyond the cryptocurrency space to become a source of financial stability all across the world’s markets.

The CEO of Basis stated:

We believe Basis can help solve this problem of currency instability for people in the developing world. By providing anyone with an internet connection access to a stable and secure medium of exchange for the first time, we believe Basis can significantly increase the efficiency of the economies of developing nations.

How will Basis fare against established stablecoins like DAI and Tether? What will make this different than other Stablecoins? Please let us know in the comment section.


Images Courtesy of Shutterstock, Twitter

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Uber Set to Expand in District

Uber is seeking to expand beyond the ride-sharing industry in Washington, D.C., to provide a larger transportation network for District residents, Uber CEO Dara Khosrowshahi said in a panel discussion on the future of mobility with D.C. Mayor Muriel Bowser (D) on April 11. Uber’s new Greenlight Hub, …

Uber is seeking to expand beyond the ride-sharing industry in Washington, D.C., to provide a larger transportation network for District residents, Uber CEO Dara Khosrowshahi said in a panel discussion on the future of mobility with D.C. Mayor Muriel Bowser (D) on April 11.

Uber’s new Greenlight Hub, a driver resource center in Ward 7, hosted the event, led by Robert Puentes, the CEO of the Eno Center for Transportation, an independent think tank dedicated to improving transportation and its public and private leadership in order to increase the system’s mobility, safety and sustainability.

Bowser and Khosrowshahi emphasized the need to ensure that District residents all have equal access to the transportation services developed by Uber through increased safety measures, affordability and equity, while stressing the importance of resolving disparities in transportation access.

“Urban transportation has a major impact on the daily lives of all D.C. residents,” Bowser said at the event. “That is why we are committed to being the capital of mobility innovation and continue to invest in strategies that make our commutes safer, stronger, more reliable and more efficient for residents across all eight wards.”

Khosrowshahi challenged Bowser’s plan to raise taxes on ride-hailing companies like Uber to generate sufficient funding for the Washington Metropolitan Area Transit Authority’s funding package announcedearlier this year. In the plan, which was approved Friday, taxes on Uber will increase to 4.5 percent from 1 percent to fund a revitalization plan for the Metro transit system, which has suffered from safety and reliability issues,as well as a declining ridership.

PHOTO COURTESY COLIN TOOZE

Bowser defended the plan and said that it was the best option for the District moving forward.

“That is the package that we think is the most fair — that hits property owners, it hits visitors, it hits residents and it hits the ride-sharing services — that we think is best for the city,” Bowser said.

But Khosrowshahi said the tax is a reallocation of similar resources and argued the plan was taxing one form of transportation for another, rather than a productive tax.

Uber’s D.C. Director of Public Relations Colin Tooze said the company does not see itself in competition with Metro or public transportation but rather sees itself as a part of a “complex ecosystem” of different transportation options.

Uber’s recent acquisitions and partnerships demonstrate the company’s interest in moving into the public space, however. One recent acquisition, Masabi, a London-based mobile ticketing service, will allow Uber to integrate into public transportation.

“You can use your Uber app to take a train, to take a subway, to take buses again on a global basis so that we are promoting mass-transit solutions as well,” Khosrowshahi said.

Uber’s recent acquisitions include bike-share startup JUMP and mobile ticketing service Masabi, both of which allow the company to move into new transportation areas.

Uber’s partnership with SharedStreets allows D.C. and the company to share transportation data. Aggregated traffic information will help cities solve congestion, Khosrowshahi said. Uber Movement uses this aggregated user data to work with cities to improve urban planning.

The panelists said they hope D.C. residents will be empowered by the wide range of transportation options planned to become available to them through the public-private partnerships, allowing them to have easier transportation throughout the city.

“Uber is transitioning from being a service that allows people to request cars at the tap of a button, to being a mobility platform that brings together all kinds of ways to get from A to B,” Tooze said.

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Taxi firms face claims over drivers’ rights in wake of Uber case

The battle for rights for gig economy workers is stepping up as the union behind legal action against Uber targets three taxi firms that say their drivers are not entitled to holiday pay or the minimum wage. Green Tomato Cars, which calls itself “London’s green and ethical car service”, luxury airport transfer …

The battle for rights for gig economy workers is stepping up as the union behind legal action against Uber targets three taxi firms that say their drivers are not entitled to holiday pay or the minimum wage.

Green Tomato Cars, which calls itself “London’s green and ethical car service”, luxury airport transfer specialist Blacklane and Birmingham’s A2B are facing claims from former drivers who say they are “workers” and not independent contractors as the car firms insist.

The cases are backed by the Independent Workers Union of Great Britain (IWGB) union, which has won a string of successful cases on worker status, including against Uber. The ride-hailing app is to challenge the ruling at the court of appeal.

An employment tribunal test case backed by the GMB union also found that some Addison Lee drivers had been wrongly classed as self-employed. Addison Lee has been granted the right to appeal against the case.

“The bogus classification of private hire drivers as independent contractors in order to deprive them of employment rights is rampant across the sector. It’s not just Uber and Addison Lee,” Jason Moyer-Lee, the general secretary of the IWGB, said.

Nelson Salei, a former driver for Green Tomato, says he is a worker and so is entitled to be reimbursed unpaid holiday pay.

Salei worked for the private hire group for several months last year, usually on five-day rolling contracts. He left after claiming he was not paid for several days of a contract after a dispute over a fare that was booked but did not turn up. He said the non-payment just before Christmas “was really frustrating”. “I wanted to have a comfortable Christmas but I had to ask people to lend me money,” he said.

Salei earned £20 an hour on the contract, under which he promised to work only for Green Tomato and turn down work from other companies such as Uber, but estimates that he took home less than half of that after paying for petrol, insurance, maintenance and leasing his car. He says he never asked for holiday pay. “I didn’t know much about my rights,” he said.

Green Tomato Cars said it “prides itself on being an ethical company and, in particular, in our relationship with drivers”.

“We have discussed the situation with Mr Salei and his union representative through the Acas mediation process, and maintain our position that there are no grounds for his claim,” it added.

“We will of course comply with the requirements of the tribunal, where we expect to successfully defend the claim.”

Mariusz Jakubowski, who worked for Blacklane in Glasgow, until just before Christmas last year, said he didn’t receive a set rate for jobs. The app works by offering a rate for a job in a particular area that gradually increases until a driver takes it up.

Jakubowski left after he was fined by the company when a customer complained he handed them a personal business card, something he denies doing. He said he had rented out his car and stopped private-hire driving after leaving Blacklane. “I was earning good money,” he said. But after receiving the fine and being assaulted by a passenger while working for another taxi service he said: “I realised it wasn’t worth it.”

Berlin-based Blacklane, which operates in more than 250 cities around the world and is partly backed by the carmaker Daimler, said: “We have not received any official information, documentation or filings about this case. Therefore, we cannot comment in any meaningful way.”

A2B’s owner Veezu, which owns several private hire firms, did not respond to a request for comment.

The gig economy has proved to be a battleground for disputes about employment status involving firms such as takeaway company Deliveroo and courier firm CitySprint. Its emergence also prompted a full-blown government review into modern employment practices, led by Matthew Taylor, a former adviser to Tony Blair.

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Bogus self-employment is thought to deny basic rights to about 1.1 million couriers, minicab drivers and other workers.

Moyer-Lee said that the government had been slow to act on the prime minister’s promise to help workers and offered little in concrete action in response to the Taylor review. He called for better enforcement of employment rules.

“What we’ve seen in case after case is that the tribunal finds these people are workers, often in scathing terms, and that shows we’ve got a serious problem in enforcement of the law,” he said.

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UBER AND LEEDS UNITED JOIN FORCES

Uber and Leeds United team up to offer fans a seamless travel experience.

Uber and Leeds United are joining forces to help reduce congestion and address the transport challenges around Elland Road.

As part of the partnership Uber will encourage people not to drive to the stadium but to leave their cars at home and use the Uber app to connect to public transport options.

Not only will this help to reduce congestion around the stadium – it will also reduce emissions in the city.

Uber and Leeds United share a long-term goal of using technology to facilitate smart urban mobility that is affordable, safe, and highly efficient as part of the fan experience.

This includes:

·Creating an integrated Leeds United and Uber Fan Experience. Makingtravel with Uber part of the matchday experience for fans, whether that’s locally in Leeds or at away games across the UK.

·Reducing private car use and peak congestion in and around Elland Road. Get more visitors out of their own cars and using Uber and public transport by helping to optimise the pick up, drop off and traffic flow experiences to reduce congestion, parking and pollution.

·Leveraging innovative technology, data and expertise to support smarter public and community planning decisions. Uber and Leeds United will work closely on a sustainable transport plan as part of a core component of the Elland Road 2020 regeneration plan.

The tie up will kick off this weekend ahead of the Barnsley game where fans will notice dedicated Uber pick up and drop off points.

Tom Elvidge, General Manager UK, Uber said: “We’re delighted to be working with Leeds United and have some very ambitious plans to help them create the best fan experience possible, while helping to reduce congestion and improve air quality.

“Uber provides a great option for people travelling to games as they don’t have to worry about parking and can enjoy a drink or two. As a Leeds fan I can’t wait for my next trip to Elland Road!”

Leeds United managing director Angus Kinnear said: “This is a really exciting partnership for the club and we hope the fans will enjoy it.

“Getting to and from the stadium will now be a seamless experience and we’re exploring ways to make help fans travel for away games as well.

“Leaving the area after a game in private cars can lead to congestion and long wait times, so this deal will really help cut down congestion in the area.”

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