ISA

Proposed Israeli law to classify crypto as securities will ‘kill the industry’

A proposed definition change by an Israeli regulator would cause immense harm to the local crypto industry, according to the CEO of Altshuler Shaham Horizon.

Proposed laws in Israel that would see cryptocurrencies classified as securities would cause huge damage to the local crypto industry, according to the chief of an Israeli crypto service provider.

Cointelegraph Magazine editor Andrew Fenton spoke with Ilan Sterk, the CEO of Altshuler Shaham Horizon. The Tel Aviv-based firm provides cryptocurrency custody and trading services and is one of the few firms in the country approved to deal with banks.

Sterk said the current legal situation for crypto in Israel is “quite complicated.”

*Altshuler Shaham* *Horizon* *CEO* *Ilan Sterk. Source: Facebook*

He explained the current proposal is to have digital assets under the supervision of the Israel Securities Authority (ISA), the nation’s securities regulator.

“To classify a digital asset as a security, it’s changing everything here,” he said. Sterk didn’t think the current proposal would be enacted as is, saying he was “not sure it will be the same as they want to be,” and added:

“You cannot classify all the digital assets as securities because it will kill the industry.”

The ISA released a proposal in early January that would give the regulator sweeping new powers to police the Israeli crypto industry.

It seeks to amend the definition of securities to include “digital assets” used for financial investment. It clarified the definition of “digital assets” as a digital “representation” of value or rights used for financial investment.

The ISA also seeks powers to oversee the crypto industry, to set requirements for issuers and intermediaries and to impose sanctions for non-compliance.

Under the ISA’s proposal, issuers of digital assets would be required to publish a prospectus-like document before issuing or registering digital assets for trading.

The public has until Feb. 12 to provide comments and feedback on the matter.

Meanwhile, the Ministry of Finance laid out its recommendations for crypto industry regulations in November last year.

Among the proposals was one that would allow crypto service providers to operate in Israel, at least temporarily, if they had a parallel license from abroad.

Sterk said the proposal would “make some lives a little bit easy” regarding the operations of foreign crypto exchanges in Israel as a license in the country “can take up to two, three or four years to get.”

According to the latest January figures from the ISA, it estimated there were around 150 companies operating in the local crypto industry, and more than 200,000 Israelis invested in crypto.

Proposed Israeli law to classify crypto as securities will hurt the industry, says crypto exec

A proposed definition change by an Israeli regulator would cause immense harm to the local crypto industry, according to the CEO of Altshuler Shaham Horizon.

Proposed laws in Israel that would see cryptocurrencies classified as securities would cause huge damage to the local crypto industry, according to the chief of an Israeli crypto service provider.

Sterk said the current legal situation for crypto in Israel is “quite complicated.”

He explained the current proposal is to have digital assets under the supervision of the Israel Securities Authority (ISA), the nation’s securities regulator.

“You cannot classify all the digital assets as securities because it will kill the industry.”

The ISA released a proposal in early January that would give the regulator sweeping new powers to police the Israeli crypto industry.

The ISA also seeks powers to oversee the crypto industry, to set requirements for issuers and intermediaries and to impose sanctions for non-compliance.

Under the ISA’s proposal, issuers of digital assets would be required to publish a prospectus-like document before issuing or registering digital assets for trading.

The public has until Feb. 12 to provide comments and feedback on the matter.

Meanwhile, the Ministry of Finance laid out its recommendations for crypto industry regulations in November last year.

Among the proposals was one that would allow crypto service providers to operate in Israel, at least temporarily, if they had a parallel license from abroad.

According to the latest January figures from the ISA, it estimated there were around 150 companies operating in the local crypto industry, and more than 200,000 Israelis invested in crypto.

Israeli securities regulator moves to establish crypto legal framework

After tasking multiple committees over the years, the Israeli Authority is ready for public comment on its proposal of crypto legal framework

The Israeli Securities Authority (ISA) proposes a framework for regulating digital assets as an increasing number of Israeli investors are exposed to digital assets, and over 150 companies operate in Israel, according to the regulator.

The regulator released a proposal in January 2023, outlining its purpose to achieve the “double value” of responding to the risks associated with investing in digital assets alongside giving the authority means to adopt a regulation.

The authority has established multiple committees over the past several years to examine and regulate the issuance of cryptocurrencies and promote the development of digital markets in Israel.

The latest committee was tasked with examining the authority’s policy on investment products in digital assets.

An amendment to the definition of the term “securities” to include “digital assets” used for financial investment was also included in the proposal.

It was further added that the definition of “digital assets” as a digital “representation” of value or rights used for financial investment.

The authority also seeks powers to oversee the digital asset industry, including setting requirements for issuers and intermediaries and imposing sanctions for non-compliance.

The document has opened the communications up for public comment until Feb. 12. It also seeks to establish a requirement for issuers of digital assets to publish a prospectus-like document before the issuance or registration of the assets for trading.

Investor protection is prioritized by requiring intermediaries in the digital asset industry to comply with rules similar to those applied to intermediaries in the traditional securities industry, such as the requirement to hold a license and meet capital adequacy standards.

Areas to address the unique features of digital assets, such as the ability to use smart contracts and the potential for tokens to have multiple functions were also mentioned.

The regulator aims to facilitate the development of the digital asset industry in Israel by allowing for the establishment of digital asset exchanges and enabling the use of digital assets as collateral.

Risks associated with digital assets were also addressed, such as the potential for fraud and market manipulation, by granting the authority the power to intervene in cases of suspected wrongdoing.

This comes after Israel’s chief economist Shira Greenberg laid out a list of recommendations to policymakers on how they should tackle digital asset laws and drive-up crypto adoption.

In a 109-page report submitted to the Minister of Finance at the end of November 2022, Greenberg called for a more comprehensive regulatory framework that would bring trading platforms and crypto issuers in line and give regulators more power to oversee the industry.