Having studied the cryptocurrency sector for nearly two years, a committee of the Israel Securities Authority (ISA) – Israel’s securities regulator – has released its own regulatory recommendation – Reuters reports.
ISA proposed the creation of a regulated cryptocurrency trading platform where companies could seek funding via digital token offerings.
The ISA recommendations include new extended securities laws to be applied to cryptocurrencies, such as special disclosure demands for cryptocurrency issuers.
Speaking to Reuters, Anat Guetta, chairwoman of the securities regulator, said that “The excitement that defined the field in 2017 has cooled off but blockchain technology is here to stay”, adding that innovation has the potential to increase competition in the market, but it’s finding a balance with investors’ protection that is the challenge.
Currently, Israeli financial service providers, including those associated with “virtual currency” – a term included in the definition of a “financial asset”, are required to obtain a license from the Supervisor on Financial Services Providers to operate
Back in January 2018, The Bank of Israel stated that it “would not recognize virtual currencies such as bitcoin as [an] actual currency and . . . it was difficult to devise regulations to monitor the risks of such activity to the country’s banks and their clients”.
Simultaneously, the Israel Tax Authority has recommended defining virtual currencies as a “means of virtual payment” or “an asset”, and therefore subject to taxation. In February of the same year, Israel’s Supreme Court issued a temporary injunction prohibiting a bank from blocking activities in an account, held by a company trading in bitcoin.