Bank of Israel on crypto deposits: banks must conduct risk assessment, track flows

While central banks around the globe aim to regulate virtual currencies, the Bank of Israel's Banking Supervision Department on Friday published a draft regulation regarding crypto deposits at banks. Specifically, banks will be required to conduct risk assessments and set out policy for transfers coming from or going into digital assets, according to a release. Lenders must also clarify the source of money used from the purchase of the crypto to its conversion to fiat currency. The draft came as "activity in virtual currencies comes with high risk in terms of the money laundering prohibition and the prohibition against the financing of terrorism," said Yair Avidan, Supervisor of Banks. Looking at intraday crypto price action, bitcoin (BTC-USD -0.3%) slips below $40K and ethereum (ETH-USD -0.6%) edges to $2.57K. Earlier, two spot Bitcoin ETFs got rejected by the U.S. Securities and Exchange Commission.