The Israeli Securities Authority (ISA) has proposed a framework for regulating digital assets, with over 150 digital asset companies operating in the country and local investors showing increased interest. The proposal suggests amending the country’s laws to include digital assets under existing securities laws, potentially classifying most cryptocurrencies as financial investments subject to ISA regulation.
Digital assets would be added to the category of financial instruments under Israeli securities law and defined as digital representations of value used for financial investment and exchangeable through a distributed ledger.
The ISA also wants the power to regulate the digital asset market, including setting standards for issuers and intermediaries and imposing penalties for non-compliance.
This initiative aims to protect investors while also allowing for the unique benefits of cryptocurrencies. Some activities involving digital assets are already subject to existing securities regulations, but the ISA believes these requirements may be difficult to implement in their current form.
In addition, the proposal aims to make it mandatory for digital asset issuers to publish a document similar to a prospectus before issuing or registering the assets for trading.
By authorizing the establishment of digital asset exchanges and allowing the use of digital assets as collateral, the regulator hopes to encourage the growth of the digital asset market in Israel. The proposal is open for public feedback until February 12th.
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