Israel Bourse Ends Cryptocurrency Deal

RAPAPORT... The Israel Diamond Exchange (IDE) has terminated itspartnership with Carats.io because the cryptocurrency company did not haveregulatory approval, both organizations told Rapaport News. The IDE has required Carats.io to cease all public displaysof association with the bourse and its Diamond Tech Innovation Center, exchangepresident Yoram Dvash said in a note to IDE members last week. The bourse hasalso asked the company to stop any activities on the trading floor or itsonline platforms, Dvash added. Dindex, Carat.io's parent company, applied for a licenseearlier this year from the diamond controller, the regulator for the Israeliindustry, a spokesperson for Carats.io said Monday. That bid was unsuccessful. "The decision of the [IDE] has been reached following, amongother things, letters sent by the Israeli controller of diamonds denying the company'srequest for a license to trade in diamonds," a spokesperson for the exchangesaid 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 thecompany buys at the Israeli bourse. It has also launched a daily diamond-priceindex, GDX, using data from trading at the IDE. "The diamond controller's decision was based on the current lackof regulations concerning digital currencies," Carats.io said. "We anticipatedthe diamond controller's decision when we first filed the request in February2018." Following Carats.io's exit from the IDE, the company willoperate internationally rather than exclusively on the Israeli exchange, itsaid. The previous agreement required it to buy diamonds to back its currencyon the Israel bourse alone, and its index was based purely on diamonds tradedat the Ramat Gan center. "Now Carats.io will purchase diamonds wherever it choosesand on terms that suit the company," the spokesperson said. Its index will alsobecome international, and will take into account broader data, the companynoted. The firm has also moved to new offices in Tel Aviv, and lastweek unveiled former IDE managing director Eli Avidar as its new president. Thecompany received $1.6 million from Net Capital Ventures last month to supportthe business.Image: Carat.io's display at International Diamond Week in Israel, February 2018. Credit: Three Photographers