Israel officially announced that Bitcoin is not a collateral. The Israel Securities Authority (ISA) Committee on the Review and Regulation of Initial Coin Offerings (ICOs) has issued a set of “recommendations” designed to address uncertainty and strike a balance between technological innovation and investor protection.. Cryptocurrencies like Bitcoin considered securities. A decision with significant implications for future regulation.
“Cryptocurrencies designed solely as a means of payment will not be considered securities.”
As a general rule, the ISA Committee determined that:
Cryptocurrencies designed to be used only as a means of payment, limited to a private venture, exchange or exchange; does not grant additional rights and is not controlled by a central institution. As such, they will not be considered securities.
Analysts are convinced this could be a precedent-setting decision as advanced economies around the world struggle with how to classify cryptocurrencies.. Israel has been a leader of sorts when it comes to crypto regulation, with a fairly cautious approach.. Bitcoin ATMs in the country do not want to know your customer ID, unlike the United States for example.. Israeli ATMs “Put Fiat, buy Bitcoin.”
“Cryptocurrencies giving rights similar to those of traditional securities such as stocks, bonds and partnership interests will be considered securities.”
The following is the report on the classification of cryptocurrencies. clarifications are included:
The question of whether a cryptocurrency should be considered a collateral will be decided in accordance with the purposes of the law with respect to the circumstances and characteristics of each case.. As a general rule, cryptocurrencies that grant rights similar to those of traditional securities such as stocks, bonds, and partnership interests will be considered securities.. Conversely, cryptocurrencies that represent rights to a product or service and are held solely for consumption and use and not for investment purposes will not be considered securities.
ISA President Ms. Anat Guetta Recommendations on the subject were given to. While wondering how the newly appointed ISA President will ban cryptocurrencies from the country’s stock market indexes earlier this month, the president is left with foes against Bitcoin.. In addition, Ms. Anat Guetta made the following statements on the subject:
We have decided to prevent passive investors from being exposed to companies whose main activity is cryptocurrencies.. Investments in these companies are high risk, speculative and volatile.. We also issued a statement warning investors in detail about the dangers of investing in the cryptocurrency market.
Israel has officially stated that for Bitcoin to be collateral, it must be acquired for investment purposes
In the summer of last year, ISA established the ICO committee. This committee exists to examine the application of the Securities Law to IPOs and issuances in Israel based on distributed ledger technology (DLT).. The committee operates to examine and analyze these initiatives, to prepare a comparative international review of relevant law, and to encourage investors to innovate in technology by outlining a proposed regulatory policy in areas related to the Securities Law.. An important litmus test of whether cryptocurrencies are collateral:
If it is issued for consumption purposes or can be traded in a secondary market, these may be indications that the acquisition is for investment, if the latter is not possible.
Israel has officially stated that for Bitcoin to be collateral, it must be acquired for investment purposes.
Israel is trying to strike a delicate balance between cryptocurrencies and ICOs
From the document it is clear that regulators are trying to strike a delicate balance when faced with the realities brought by cryptocurrencies and the ICOs they produce.. For the crowdfunding mechanism, the committee made the following statements:
The use and expansion of certain current and future capital raising avenues for ICOs should be considered, including examining the following issues: Small-scale ICOs light editing; Raising capital through ICOs on crowdfunding platforms; Define a temporary framework for ICOs pilots in the form of a regulatory sandbox, including oversight of cryptocurrency developers; Examine the option to trust foreign regulation applicable to cryptocurrencies.