Cryptos, financial assets in Israel? – There categorization of these new monetary UFOs keep on debating. And, government authorities strive to bring cryptocurrencies into existing boxes rather than creating a dedicated category. This is the case in Israel with a law Project which threatens the sustainability of the ecosystem.
Stock or commodity? The classification of cryptocurrencies is a long debate carried out in all countries of the world. The challenge ? Knowing which regulations to apply to this new category of assets which is suddenly disrupting the economic world. That’s the whole point of the lawsuit between Ripple and the SEC (Securities Exchange Commission) whose verdict has not yet come.
However, a question arises. How could these cryptocurrencies, so recent and so different from what we know in many aspects, fit into boxes established for decades? Financial assets or commodities? What if it was neither? What if, in order to allow the sector to develop, the technology to prosper, it was necessary to create a whole new box?
One thing is certain. The Israeli regulator does not hear it that way. Through I’Israel Securities Authority (ISA), a bill dating from the beginning of January threatens the development of companies in the sector in the country. This proposes purely and simply to consider the cryptocurrencies like the Financial assets, in the same way as company shares. For Ilan Sterkthe CEO of Altshuler Shaham Horizon, a local exchange, the approval of such a law will cause irreparable damage to the local crypto sector.
“You can’t classify digital assets as stocks because that would kill the industry. »
Ilan Sterk
Ilan Sterk’s company is far from being a small player in the country. The exchange offers services similar to those of Binance: holding crypto, trading… It is one of the few players with a license of Capital Market Authority (CMA). This allows it to work in concert with local banks.
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Israel on the way to making its choice on cryptos
The regulatory situation is therefore particularly complex in Israel, like the French sector threatened by a vote of the Assembly on January 24which could have doomed the future of crypto startups in France. A respite was fortunately found after this highly contested vote. It is not certain, however, that the Israelis enjoy the same luck. They have until February 12 to decide on this bill before implementation begins.
With the ISA proposal, a heightened surveillance Israeli regulatory authorities would then immediately impose themselves on crypto actors with, as a result, sanctions in the event of non-compliance. For example, issuing new cryptos would require prior publication of some form of “prospectus” before any listing or trading on the platforms.
Regulators in all countries are busy regaining control of this crypto ecosystem which they have long ignored, perhaps underestimated. But acting hastily and in an exaggerated way could totally doom the future of the sector in the legislated country. Another sector developingwhich perhaps has not yet revealed a third of its potential: technological potential, geostrategic issues.
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