According to the CEO of Altshuler Shaham Horizon, a planned definition modification by an Israeli authority will do enormous harm to the local crypto business.
According to the CEO of an Israeli crypto service provider, proposed rules in Israel that would classify cryptocurrencies as securities would be devastating to the local crypto business.
Andrew Fenton, editor of Cointelegraph Magazine, chatted with Ilan Sterk, CEO of Altshuler Shaham Horizon. The Tel Aviv-based business offers bitcoin custody and trading services and is one of the country’s few organizations authorized to work with banks.
According to Sterk, the existing legal status for cryptocurrency in Israel is “very difficult.”
He said that the current concept is to have digital assets supervised by the Israel Securities Authority (ISA), the country’s securities regulator.
“To define a digital asset as a security changes everything,” he explained. Sterk did not believe the present idea will be implemented in its current form, stating he was “not confident it will be the same as they want it to be,” and added:
“You cannot classify all the digital assets as securities because it will kill the industry.”
In early January, the ISA proposed broad new powers for the regulator to monitor the Israeli crypto business.
It proposes changing the definition of securities to include “digital assets” used for financial investment. It defined “digital assets” as a digital “representation” of value or rights that may be utilized for financial investment.
The ISA also seeks authority to monitor the crypto business, establish regulations for issuers and intermediaries, and apply penalties for noncompliance.
Before issuing or registering digital assets for trade, issuers of digital assets would be obliged to publish a prospectus-like document, according to the ISA’s proposal.
The public has until February 12 to submit comments and thoughts on the issue.
Meanwhile, in November of last year, the Ministry of Finance released its suggestions for crypto business rules.
One of the suggestions would enable crypto service providers to operate in Israel, at least temporarily, if they held a counterpart license from another country.
Sterk stated that the idea would “make some lives a little bit easier” for international crypto exchanges operating in Israel, as obtaining a license in the country “may take up to two, three, or four years.”
According to the ISA’s most recent January numbers, there are over 150 businesses active in the local crypto market, and over 200,000 Israelis have invested in crypto.
