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Rare indictment for evading Bitcoin tax: "Authorities start enforcing"

The prosecution has filed an indictment against Leshem Akrish, alleging that he allegedly stole two million shekels from trading profits in Bitcoin.

We turned to lawyers in the industry and got the impression that if you are trading in the currency, it is time to report: "The existence of regulatory obligations must be verified"

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Walla!

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Wednesday, 27 January 2021, 16:03

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So far it has been a very decentralized and dispersed field.

Now regulation enters the picture (Photo: ShutterStock)

Adv. Uri Goldman

A rare indictment was filed today (Wednesday) against Leshem Akrish.

Akrish, 34, is accused of omitting NIS 2 million in revenue from Bitcoin sales.

According to the indictment, Akrish did not report his income to the tax authority, did not report on starting a business and omitted the receipts from the income report.

What does the future hold in this area?

"Calculating the tax on bitcoin is complex," explains attorney Uri Goldman, who specializes in tax law. And the prohibition of money laundering, which represents in a number of cases involving taxpayers who have traded in cryptocurrencies, "a person should pay tax on the realization of the cryptocurrency. In this case, check how much money he bought the currency, how much he sold it, and the profit determines the taxation. Sold. "

Advocate Goldman says that “there are two types of people - someone who has not reported his transactions at all and caught him - and then he has a problem that may in some circumstances be a criminal problem (non-reporting / tax evasion).

On the other hand, there are others who thought of planning a tax on the assumption that the tax authority would not reach them and therefore did not pay attention to taxation.

There are no clear criteria, and when there are no clear criteria it is certainly not possible to convict in a criminal case that requires 'knowledge' and at most it is a civil proceeding.

It should also be remembered that the Bitcoin currency is not anonymous.

"Because buyers do the trading through organized exchange companies, there is a record of the above transactions. The tax authority periodically contacts these companies and receives data from them about their customers and thus knows how to generate the money path."

Goldman adds that "the issue of seizure and forfeiture of bitcoin wallets is also complex, since the currency is decentralized and holding in the physical wallet is not equivalent to the virtual presence of the currency."

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An indictment indicating the future to come

Adv. Erez Abohav

According to Advocate Erez Abohav, who specializes in criminal and corporate representation, “This is a precedent-setting indictment designed to produce a new standard of public behavior, and shows that law enforcement educates the public through criminal enforcement and punishment, rather than by regulating and educating.

The bill that proposed to mass capital gains from digital currencies was approved only in September 2020 and here in January a precedent and initial charge is already being filed.

Enforcement activity underscores the importance of digital currencies in the business world, and authorities are trying to adapt to the advanced Western reality.

The use of digital currencies is considered very safe in terms of money laundering or various manipulations because they have high security technologies.

The filing of the indictment shows that the authorities have begun to see the currency as a legitimate asset that should be taxed.

This indictment indicates the future to come, including and including the forfeiture fund in Israel and the money laundering charges.

According to Adv. Abohav: "Every currency service provider would do well to appoint a unique compliance officer who will verify compliance with the regulatory obligations in his business and with agents on his behalf in the field of money laundering."

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