The cryptocurrency, digital assets and blockchain industry presents unique tax, regulatory, banking and commercial challenges. Transactions involving digital assets may give rise to complex questions concerning capital gains, business income, VAT, reporting obligations, source of funds and the interaction between innovative technologies and traditional financial regulation.

Bracha & Co. has developed extensive expertise in the cryptocurrency and blockchain sector and advises private investors, entrepreneurs, companies and blockchain ventures on the full range of tax and related legal matters arising from their activities.

Our expertise extends beyond taxation. The firm has an in-depth understanding of the commercial and operational aspects of the digital asset industry, enabling us to understand the underlying activity and develop solutions that reflect both the technology and the business model.

Cryptocurrency & Digital Asset Taxation

The firm advises on the taxation of a broad range of cryptocurrencies, tokens and digital assets, including trading and investment activity, conversions between digital assets, staking, mining, DeFi activities and other blockchain-based transactions.

We assist clients in determining the appropriate tax classification of their activities, calculating taxable gains and losses, reconstructing historical transactions and addressing reporting obligations relating to complex activity conducted across multiple wallets, exchanges and platforms.

Where necessary, we work alongside blockchain analytics and other specialist professionals to reconstruct and document the client’s activity.

Blockchain Ventures, Token Issuances & New Projects

Bracha & Co. advises entrepreneurs and companies on the establishment and development of cryptocurrency and blockchain ventures, including token issuances, the creation of new projects, corporate and international structures and the tax implications of different business models.

Our involvement often begins at the planning stage, allowing tax, corporate, banking and regulatory considerations to be incorporated into the structure of the venture before implementation.

This combination of tax expertise and commercial understanding enables the firm to advise not only on how a transaction should be reported, but also on how a project can be structured and operated effectively within the applicable legal and tax framework.

Banking, Source of Funds & Digital Assets

One of the most significant challenges faced by cryptocurrency investors and businesses is the interaction with the traditional banking system.

Bracha & Co. has substantial experience representing clients before banks and compliance departments in connection with the receipt and transfer of funds originating from digital asset activity.

The firm assists in reconstructing and documenting the source and path of funds, analyzing wallet and exchange activity, preparing the legal and tax documentation required by financial institutions and presenting complex cases to senior compliance professionals.

Voluntary Disclosure & Regularization of Historical Activity

The firm represents clients seeking to regularize cryptocurrency and digital asset activity that was not fully reported in previous years. Our work includes reconstructing historical transactions, calculating the relevant tax exposure, identifying potential issues before approaching the authorities and developing a comprehensive strategy for regularization.

Unique Professional Experience

The firm’s team includes Mr. Beni Yona, former Head of the Cryptocurrency Practice at the Israel Tax Authority, where the field operated within the Capital Markets Division.

This experience, together with the firm’s extensive involvement in cryptocurrency taxation, blockchain ventures, banking and compliance matters, provides Bracha & Co. with a distinctive perspective on the sector – combining an understanding of the tax authorities’ approach with practical knowledge of the commercial and technological environment in which our clients operate.

For advice and representation on cryptocurrency, digital assets and blockchain taxation, please contact Bracha & Co.