The Israel Securities Authority (ISA), the country’s market regulator, made recommendations for the creation of a standardized digital assets platform that would support crypto trading and allow firms to raise funds by issuing tokenized assets to investors, reports Reuters on March 6, 2019.
Israel Looking to Regulate Cryptos
Per the report, a committee at the ISA has recommended the establishment of a well-regulated platform that will be used to trade blockchain-based virtual currencies and also support the issuance of tokens by startups to investors.
The committee, which has reportedly been studying the cryptocurrency market for almost two years has been seeking ways to improve initial public offerings (IPO) and also attracting potential investors into the market.
They have, however, outlined the need for the regulation of such platforms in order to create a balance between increased competition in the capital market and protecting investors.
Reportedly, in comparison to a decade ago, the number of companies in the industry, as well as the amount raised in Tel Aviv, has been on the decline.
The Application of Securities Law to Cryptocurrencies
Suggestions have also been made for the application of securities law for cryptocurrencies. Specifically, the regulator is looking to modify the existing regulation to include disclosure demands that will be applicable to companies who intend to offer crypto-related services.
According to Anat Guetta, ISA’s chairperson, the excitement of 2017 which defined the cryptocurrency market has waned.
Guetta opined that distributed ledger technology (DLT) is capable of increasing competition in the capital market. While a fixed time for the final decision has not been relayed, these recommendations can be said to be a step in the right direction given the past cryptocurrency regulation issues in the Middle East nation.
For starters, the ISA had made plans in 2017 to ban cryptocurrency firms from entering the Tel-Aviv stock exchange.
There were expectations that the ban would be incorporated into the stock exchange bylaws to prevent these companies and existing ones from trading in the stock market. Shmuel Hauser, the former chairman of the ISA had said:
“If we have a company that their main business is digital currencies we would not allow it. If already listed, its trading will be suspended.”
Asides from the ISA considering cryptocurrencies as a threat at that time, the Tel Aviv district court on June 6, 2017, ruled in favor of a financial institution, Bank Leumi, in the case against a cryptocurrency company, Bits of Gold, whose banking services were discontinued.
On February 20, 2018, BTCManager also informed that the Israeli authorities intend to levy taxes on bitcoin and other cryptocurrencies which may have discouraged investors from entering the market.