Israel could include crypto in existing national laws

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The Israel Securities Authority (ISA) may change three of its existing currency laws to put pressure on cryptocurrencies.

The regulator’s proposals aim to give investors maximum security when dealing with digital assets, recalling the recent collapse of FTX and the severe losses it caused to consumers.

Pay attention to cryptography

Israel’s financial watchdog has proposed that cryptocurrencies be included in existing national securities legislation. As such, the regulator will directly oversee operations with bitcoin and altcoins. This will also place the asset class in the “financial instruments” category, where securities, marketing and joint investments are also found.

The potential amendment aims to give Israeli crypto participants additional protection and highlight the technological advancement of the sector.

“Cryptocurrencies are a digital representation of value used for financial investment purposes and may be transferred and stored electronically using distributed ledger technology or other technology,” the ISA said.

The regulator believes that the adoption of the crypto industry could have a positive effect on the Israeli economy, as it could trigger a flow of diversified capital.

“The advanced technology of these assets can lead to economic efficiency in many areas, reduce costs, avoid the need for intermediaries and optimize the way information is transferred between entities,” the proposal states.

The ISA added that cryptocurrencies have become a widespread niche in the Mediterranean nation, with more than 200,000 Israelis exposed to the market and around 150 companies operating in the field.

The proposal is open for public comment until February 12 and could come into effect after six months.

Reminder on FTX and Celsius

The ISA believes global regulators failed to impose relevant rules on the crypto industry last year, leading to the demise of many companies, such as FTX and Celsius Network. He also pointed out that the founder of the latter is Alex Mashinsky, of Israeli origin.

Celsius suspended withdrawals, trades and transfers between accounts in June last year, citing “extreme market conditions”. The company raised hopes that the move would stabilize its cash.

On the contrary, the former crypto giant’s problems continued and it had to lay off 150 of its workforce in July. It filed for Chapter 11 bankruptcy a week later, while CEO Mashinsky resigned from his post in September. The company was close to reaching an acquisition agreement with FTX, but the fate of the latter erased those plans.

Celsius recently extended the deadline for customers to submit complaints until January 10 (at least). Considered one of the leading companies in the crypto lending industry, it had 1.7 million customers at the start of last summer. Its creditors include the bankrupt Alameda Research and Pharos USD Fund SP.

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