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Israel Bourse Ends Cryptocurrency Deal
Jun 26, 2018 7:01 AM
By Joshua Freedman
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RAPAPORT... The Israel Diamond Exchange (IDE) has terminated its
partnership with Carats.io because the cryptocurrency company did not have
regulatory approval, both organizations told Rapaport News.
The IDE has required Carats.io to cease all public displays
of association with the bourse and its Diamond Tech Innovation Center, exchange
president Yoram Dvash said in a note to IDE members last week. The bourse has
also asked the company to stop any activities on the trading floor or its
online platforms, Dvash added.
Dindex, Carat.io’s parent company, applied for a license
earlier this year from the diamond controller, the regulator for the Israeli
industry, a spokesperson for Carats.io said Monday. That bid was unsuccessful.
“The decision of the [IDE] has been reached following, among
other things, letters sent by the Israeli controller of diamonds denying the company’s
request for a license to trade in diamonds,” a spokesperson for the exchange
said in a statement Tuesday.
Carats.io, which operated out of the IDE’s innovation center,
is developing digital coins that, until now, had been backed by diamonds the
company buys at the Israeli bourse. It has also launched a daily diamond-price
index, GDX, using data from trading at the IDE.
“The diamond controller’s decision was based on the current lack
of regulations concerning digital currencies,” Carats.io said. “We anticipated
the diamond controller’s decision when we first filed the request in February
2018.”
Following Carats.io’s exit from the IDE, the company will
operate internationally rather than exclusively on the Israeli exchange, it
said. The previous agreement required it to buy diamonds to back its currency
on the Israel bourse alone, and its index was based purely on diamonds traded
at the Ramat Gan center.
“Now Carats.io will purchase diamonds wherever it chooses
and on terms that suit the company,” the spokesperson said. Its index will also
become international, and will take into account broader data, the company
noted.
The firm has also moved to new offices in Tel Aviv, and last
week unveiled former IDE managing director Eli Avidar as its new president. The
company received $1.6 million from Net Capital Ventures last month to support
the business.
Image: Carat.io’s display at International Diamond Week in Israel, February 2018. Credit: Three Photographers
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Tags:
CARATS.IO, cryptocurrency, Diamond Tech Innovation Center, diamond-trading license, digital coins, Dindex, Eli Avidar, GDX, IDE, innovation center, Israel, Israel Diamond Exchange, Joshua Freedman, Net Capital Ventures, price index, Ramat Gan, Rapaport News, technology, Tel Aviv, Yoram Dvash
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