A court in Israeli has declared that Bitcoin (BTC) is an asset that should be subject to the country’s capital gains tax (CGT). The court’s ruling notes that BTC is not a currency.

Globes, an Israeli-based business news outlet, reports that the ruling was delivered by a judge sitting in Israel’s Central District Court, and involved the Israel Tax Authority and the founder of a blockchain startup based in the country.

In its report, Globes notes that Noam Copel, the founder of DAV.Network had been accused of making profits from a bitcoin sale and thus should have paid taxes on it.

In a ruling that gave the tax agency victory, Copel was said to have bought BTC in 2011 and made $2.29 million in profit from its sale in 2013. He argued that the court should treat bitcoin as a foreign currency and thus not subject to taxation.

But judge Shmuel Bornstein was convinced otherwise. He agreed with ITA, which argued that bitcoin wasn’t a currency. The judge also observed that being a cryptocurrency, there was likelihood bitcoin could cease to exist. He said is this case, another digital currency could easily replace bitcoin and therefore, you cannot classify BTC as a currency, particularly for the purposes of taxation.

The verdict means that Copel will now have to pay taxes of around 3 million NIS (approximately $830,600). He will also bear costs totaling 30,000 NIS (roughly $8,306). However, this might not be the end of the case. Copel could still appeal to the country’s Supreme Court and seek that the court reverses the lower court’s decision.

Noticeably, the court’s verdict sides with the Israeli government’s stance that bitcoin is property, and thus taxable. The tax agency ITA has said that crypto is subject to capital gains tax at the rate of 20%- 25%.