Broad Underperformance Across All Assets
Israel’s push to surface undeclared cryptocurrency holdings is falling far short of expectations, with new data showing that taxpayers are largely avoiding the country’s latest voluntary disclosure program.
According to a report, since the Israel Tax Authority launched the initiative in August 2025, only 58 crypto-related disclosure requests have been filed, revealing roughly $50.7 million (145.8 million shekels) in hidden digital-asset capital. That figure is a fraction of the estimated $1.04 billion in unrealized crypto tax revenue identified by the State Comptroller.
The broader program, which covers all forms of concealed wealth, has also underperformed. A total of 289 disclosure requests have been submitted across all asset types, reporting approximately $236 million in hidden capital and generating an estimated $14 million in tax revenue. Authorities had projected between $700 million and $1 billion in collections.
Tax advisers say the sharp drop-off is no mystery. Unlike previous disclosure rounds, the current program does not allow taxpayers to file anonymously while assessing their exposure — a feature that had been especially important for crypto holders wary of enforcement risks.
Iftach Simhony, a lawyer, certified public accountant, and partner and head of the tax department at Prof. Bein Law Office, said the change fundamentally altered the incentives.
“The cancellation of the anonymous track not only deterred taxpayers, it changed the balance of power in the process,” Simhony said. “Everything is exposed to the Tax Authority, and there is no real ability to negotiate. The taxpayer is required to enter the process before knowing what the actual exposure will be, and therefore many prefer to stay out.”
Simhony added that the impact is even more pronounced in digital assets, where taxpayers often have complex transaction histories and uncertain tax liabilities.
“When the procedure itself does not offer certainty or anonymity in the first stage, the incentive to undergo voluntary disclosure is weakened.”
The Tax Authority had intensified efforts to track undeclared crypto profits even before the program launched, following criticism from the State Comptroller over lax enforcement. The agency has been working to identify “black” capital circulating through digital wallets, offshore exchanges, and peer-to-peer channels.
But the new disclosure track — which runs until Aug. 31, 2026 — appears unlikely to bring those funds into the open. Even with a simplified “green track” for small amounts, including crypto gains, experts say the lack of anonymity has overshadowed the program’s benefits.
Israel’s previous voluntary disclosure rounds in 2011-12, 2014-16, and 2017-19 collectively handled about 9,000 cases and generated $1.74 billion in tax revenue. By comparison, the current program is on pace to be the least effective to date.
