The Israel Securities Authority (ISA) is working to create a new regulatory framework for digital assets that mostly falls within its purview, which might provide the sector more clarity.
According to the plan, the country’s laws would be changed to incorporate “digital assets” into the existing securities legislation, potentially designating the majority of cryptocurrencies as financial investments subject to ISA control. The amendments would add digital assets to the existing category of “financial instruments” in Israeli securities law and define them as digital representations of value that are utilised for financial investment and that can be exchanged using a distributed ledger.
The government claimed that while allowing for the special benefits of cryptocurrencies, this endeavor is intended to safeguard investors. Although some activities involving digital assets are already subject to existing securities rules, the ISA claims that the requirements may be challenging to implement in their current form.
The proposal from the authority asks for public input until February 12 and specifies a six-month window before it would take full effect following approval. The ISA has also made an effort to remember that the rules need to be adaptable in order to take into account developments in blockchain technology
Anat Guetta, the ISA chairwoman, has made it clear that she doesn’t see much of a difference between cryptocurrencies and securities, following the lead of Gary Gensler, the chairman of the U.S. Securities and Exchange Commission.
The agency emphasized in this week’s recommendation that the business has been severely harmed by high-profile failures, including Celsius’ downfall, which had sizable operations in Israel.
Israel’s securities watchdog has taken the latest measure following Israel’s Ministry of Finance’s decision to issue a series of recommendations for the regulation of digital assets in November in an effort to expedite the country’s entry into the market.