Earlier this week, the Capital Market Authority distributed a draft circular to the crypto industry. If this sentence sounds familiar, it is because it marks the third time in the past two months that the Authority has published new guidelines for the sector. At the same time, the Bank of Israel has also issued updated instructions for banks, creating what appears to be an unprecedented regulatory push for the Israeli crypto market.

Cryptocurrency is a digital asset based on blockchain technology. It operates without central intermediaries and, in most cases, is characterized by significant price volatility. For years, Israel’s crypto industry was viewed as a kind of “backyard” of the financial system: an advanced technology sector…