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Investment firm launches Bitcoin-backed bonds on Tel Aviv Stock Exchange despite regulatory warnings

Investment firm launches Bitcoin-backed bonds on Tel Aviv Stock Exchange despite regulatory warnings

The Silver Castle Investment House is the first firm to list Bitcoin-linked bonds on TASE UP, making such investments available to qualified and institutional investors

CTech | 09:09  12.08.2021

The digital currency investment house, Silver Castle, and the Tel Aviv Stock Exchange announced the first-ever issuance of Bitcoin linked and backed bonds on TASE UP. This new channel of investment in Bitcoin will create a pathway for institutional and qualified investors to enter the digital currency realm and further diversify their investment portfolios. However, Calcalist learned that on Wednesday, the Capital Market Authority, Insurance and Savings, sent out a letter to institutional investors in Israel demanding to report any investment they made in Bitcoin this year and explain their decision to do so. The Authority wrote in its letter that it considers investing in Bitcoin to be speculative, claiming that it has no intrinsic value.

The series of bonds issued by Silver Castle will last for three years and not bear interest. The capital raised in the issuance will be used for the purchase of Bitcoin, and the money will be exposed to the current exchange rate in shekels, with fewer commissions. The trading of the bonds will be subject to TASE UP’s rules. The new financial tool will enable exposure to Bitcoin with significantly reduced operational risks and product holding costs. Until now, Bitcoin could only be obtained through direct purchase and holding, Bitcoin delivery agreements, and Israeli or foreign hedge funds.

TASE UP will allow investors to trade Bitcoin-linked and backed bonds. Photo: Dan Kitwood TASE UP will allow investors to trade Bitcoin-linked and backed bonds. Photo: Dan Kitwood TASE UP will allow investors to trade Bitcoin-linked and backed bonds. Photo: Dan Kitwood

Silver Castle is a digital assets investment house, which was founded in 2018 by Israeli banking and capital market executives, including Zvi Ziv, former CEO of Bank Hapoalim, Gaby Ravid, former CEO of Psagot Investment House, and Eli Mizroch, formerly senior executive in Bank Hapoalim and CEO of Golf. The firm specializes in identifying digital currency investment opportunities for institutional and qualified investors.

TASE UP is a private platform that operates separately from TASE's public companies' trading platform, and the companies listed are private ones looking to raise funds from institutional investors and qualified clients. Unlike a public company, they remain private and are not subject to reporting requirements under the Israel Securities Law.

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"Technology has changed the way we manage our funds and investments, and the new generation of investors is influencing the market format and investment channels. The issuance of this novel financial instrument in Israel will allow us to catch up with the global market and U.S. institutional investors,” said Eli Mizroch, CEO of Silver Castle Investment House.

"The launch of TASE UP allows institutional and qualified investors direct access to new investment opportunities, in both private companies and innovative products, such as Bitcoin-linked bonds. The investors will enjoy liquidity for investments, listing, clearing, and operation of their payments as part of TASE's strategy of expanding its range of products and diversifying the pool of investors,” said Ittai Ben Zeev, who serves as the CEO of TASE.
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