The Tel Aviv District Ethics Committee of the Israel Bar Association recently ruled that attorneys may collect fees for their services using Bitcoin. The committee’s decision was handed down without regard to the regulatory problems that arise from using Bitcoin, a virtual currency based on an encryption system that allows covert use, without the payer or payee having to expose their identities to authorities. Bitcoin’s legal status varies among countries: a year ago, European authorities granted official status to the coin as a payment provider with an international bank identifier code, while in Thailand all use of the coin was banned until further notice.
The Ethics Committee’s decision was handed down following an inquiry by Advocate Matan Shok that asked for the committee’s approval to advertise that he is willing to receive compensation for his legal services through Bitcoin. As a result of the Ethics Committee’s approval, Advocate Shok will have to now cope with the complicated tax issues that arise from using the currency, particularly the fact that there is no official exchange rate for the Bitcoin versus recognized currencies. Banks in Israel restrict commercial transactions based on Bitcoin, and the Central Bank of Israel has yet to give a formal decision as to whether it will require Israel’s commercial banks to permit or forbid such transactions. Source: Ha’aretz (In Hebrew, by Ido Kenan).