Letters have been sent out to those suspected to be trading bitcoin without reporting it. The letters are from the various local branches of the Israel Tax Authority.
The tax agency demands in those letters that the recipients will make public all of their involvement in the cryptocurrency market including all past transaction history and current holdings.
Moreover, People are being asked to list all exchange accounts and wallets they ever had and report their trade earnings. Additionally, the agency demands that people will reveal if they are engaged in mining as well.
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With no slowing down, Israel Tax Authority Hunts for Bitcoin Traders on Social Media. The Tax Authority is not exposing how it got its hands on a list of bitcoin traders in the country to check if they report or not, but there a few obvious ways.
First, the banking system in Israel is not friendly with any bitcoin dealings, and the banks thus probably proactively report all inbound and outbound transactions involving known accounts of exchanges abroad as possible money laundering and tax evasion. And the few local trading avenues available to Israelis can easily be compelled to hand over a list of their clients with a warrant.
Another way is that Investigators now uses more creative means, however, people familiar with the tax scene told the Globes newspaper. They claim that undercover agents are monitoring local groups for peer to peer buying and selling of bitcoin and other cryptocurrencies on Facebook, Telegram and Whatsapp.