Israeli Regulator Shut Down Crypto Exchange Bitin and Fined It $460K

The Israeli financial regulatory authority has ordered the immediate closure of cryptocurrency exchange Bitin, as it operates without a licence in the country. Furthermore, the platform’s operator also faces a financial sanction of about 1.7 million shekels (US$460,000).

A Crypto Exchange by the “Bitcoin King of Israel”

The action against Bitin was taken under an order issued by the Commissioner of Capital Markets, Insurance, and Savings, Amit Gal. Although the Bitin website remains live, Finance Magnates verified that crypto buying and selling services on its platform have stopped working.

As seen on its website, Bitin offered buying and selling services for many cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Ripple, USDT, and USDC. It even claimed that its customers would “receive the best rates in Israel for buying Bitcoin and other virtual currencies.”

Interestingly, the website's footer mentions that “this site does not provide financial services” (translated from Hebrew).

In Israel, crypto exchanges must obtain a licence from the Israeli Capital Market, Insurance, and Savings Authority (CMISA), which regulates cryptocurrency service providers under the Financial Services Supervision Law.

Rejection Is Not the End

According to the Israeli regulator, Bitin’s application for a licence was rejected in 2022 due to the operator’s prior criminal investigation. However, that rejection did not stop him, as he continued to offer buying and selling services for virtual currencies, thus violating local law.

The exchange operator was arrested in February 2020 on suspicion of tax crimes and money laundering, along with three other project participants. However, a year later, the operator, known as the “Bitcoin King of Israel,” was cleared of the money laundering charges but had to pay 15 million shekels in fines for violating reporting requirements.

Earlier this year, the Israeli Securities Authority (ISA), which oversees the country’s financial market, issued a public warning against a binary options trading platform, Pocket Option, which targets traders in the country. The regulator banned the marketing and distribution of binary options in Israel in March 2016 due to widespread scams, which led such companies to focus on selling abroad. The final nail in the coffin came in October 2017 with the ban on the international marketing of binary options by Israelis.