Proposed Israeli law to classify crypto as securities will hurt industry, says crypto chief
Proposed laws in Israel that would see cryptocurrencies classified as securities would cause huge damage to the local crypto industry, according to the head of an Israeli crypto service provider.
Cointelegraph Magazine editor Andrew Fenton spoke with Ilan Sterk, CEO of Altshuler Shaham Horizon. The Tel Aviv-based firm offers custody and trading services for cryptocurrency and is one of the few firms in the country approved to handle banks.
Sterk said the current legal situation for crypto in Israel is “quite complicated.”
He explained that 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, that changes everything here,” he said. Sterk did not believe the current proposal would pass as is, saying he was “not sure it will be the same as they want it to be,” adding:
“You can’t classify all digital assets as securities because that will kill the industry.”
The ISA released a proposal in early January that would give the regulator sweeping new powers to oversee the Israeli crypto industry.
It seeks to change the definition of securities to include “digital assets” used for financial investments. 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 impose requirements on issuers and intermediaries and to impose sanctions for non-compliance.
Under the ISA’s proposal, issuers of digital assets will be required to publish a prospectus-like document before issuing or registering digital assets for trading.
The public has until 12 February to provide comments and feedback on the matter.
Meanwhile, the Ministry of Finance presented its recommendations for the crypto industry’s regulations in November last year.
Related: Israeli courts rule that authorities can seize crypto in 150 blacklisted wallets
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 easier” regarding the operation 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 that there were around 150 companies operating in the local crypto industry, and more than 200,000 Israelis invested in crypto.
