Crypto Firm Bits of Gold Obtains Capital Markets License from Israeli Regulator

Bits of Gold, an Israeli-based firm engaging in crypto trading and brokerage services, announced on Thursday that it has obtained a license from Israel’s financial market regulator, the Capital Markets, Insurance and Savings Authority.

With the license from the watchdog, Bits of Gold said it will be able to partner with local banks and financial institutions. The crypto firm said the license, along with the recent guidelines from Israel’s central bank, will help resolve many issues associated with relationships between local banks and crypto.

The move makes Bits of Gold the first local crypto provider to obtain the license. The company said it applied for the license back in 2018.

Bits of Gold is preparing to develop a platform that will enable local and European banks and fintech firms to offer cryptocurrency services to customers. The company wants to start offering crypto custody services through its new digital wallet starting next month.

Is This the Beginning of Crypto Trading in The Country?

In the past, local banks had taken an ad hoc approach to accepting deposits tied to crypto investments. But that changed in November last year when the country’s capital market regulator approved Israel’s new anti-money laundering (AML) and anti-terrorist financing rules for crypto asset service providers. The rule cleared the way for local banks to more easily accept customers from the crypto sector.

The new AML rules cover the identification and verification of crypto recipients, reporting requirements for crypto companies, and the layout of a risk-based approach to dealing with money laundering.

In March, Israel’s central bank published draft regulations that further opened up the country’s financial system to crypto firms by requiring banks to examine the crypto firms individually rather than imposing blanket refusals on them.

In late March, Bank Leumi became the first Israeli bank to start facilitating crypto trade. Early this month, Israel’s financial market regulator granted a first permanent license to a local private firm, Hybrid Bridge Holdings Ltd., to engage in cryptocurrency activities. As a result, Hybrid Bridge Holdings is now building a crypto custody and exchange platform.

In Israel, many firms seeking to engage in the crypto industry are still obtaining approval from the regulator.

In February, the Binance exchange came under the regulator’s scrutiny over licensing issues. The watchdog ordered Binance to suspend marketing to Israeli users and stop all activities focused on Israel until the issues are addressed.

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Sparkster Settles SEC Charges for Unregistered ICO, Agrees to Pay $35M to ‘Harmed Investors’

Sparkster, a crypto firm based in the Cayman Islands, and its CEO, Sajjad Daya, on Monday agreed to pay more than $35 million in a settlement with the U.S. Securities and Exchange Commission (SEC) over an “unregistered initial coin offering (ICO)” in 2018.

The SEC issued a cease-and-desist order Monday against the two, alleging that they raised approximately $30 million from 4,000 investors between April and July 2018 by offering them unregistered crypto asset securities called “SPRK tokens.”

According to the SEC, Sparkster told investors the funds collected would go towards helping the crypto firm develop its “no-code” software platform for children and promised that their tokens would increase in value.

Sparkster and Daya were found guilty of defrauding innocent investors and violating federal securities laws without registering their crypto-asset offering.

Without admitting or denying the agency’s findings, Sparkster and its CEO agreed to pay a collective $35 million into a fund distributed to investors harmed by the SPRK ICO.

“The resolution with Sparkster and Daya allows the SEC to return a significant amount of money to investors and requires additional measures to protect investors, including the disabling of tokens to prevent their future sale,” said Carolyn M. Welshhans, associate director of the SEC’s Division of Enforcement.

Sparkster will pay $30 million in disgorgement, $4.6 million in prejudgement interest, and a $500,000 civil penalty. The company also agreed to destroy its remaining tokens, remove its tokens from any trading platforms, and publish the SEC’s order on its website and social media channels.

Daya will pay a $250,000 civil penalty and also agreed not to participate in offerings of crypto asset securities for five years.

In relation to this case, the SEC also charged crypto investor and YouTuber Ian Balina over his involvement in promoting the above-mentioned SPRK ICO. Blockchain.News reported the matter today.

As per SEC, Balina did not disclose to investors that he had been paid to market the ICO. Balina also allegedly violated federal securities laws by conducting an unregistered sale of SPRK tokens he bought before the ICO.

Balina promoted SPRK on social media channels without disclosing that he would get a 30% bonus on the $5 million in tokens he bought, the watchdog stated.

SEC’s settlement with Sparkster is the latest indication the regulator is determined to clear its backlog of cases stemming from the ICO boom of 2017 and 2018.

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