• The Israeli Securities Authority (ISA) has proposed a framework for regulating digital assets.
• The proposal outlines the Authority’s intention to address the risks associated with investing in digital assets while also giving the Authority means to adopt a regulation.
• The public has been invited to provide comments on the document until Feb. 12.
The Israeli Securities Authority (ISA) is taking steps to establish a legal framework for digital assets. This move comes as an increasing number of Israeli investors are exposed to digital assets and over 150 companies operate in Israel, according to the regulator.
In January 2023, the ISA released a proposal outlining its purpose to achieve the „double value“ of responding to the risks associated with investing in digital assets while also giving the Authority means to adopt a regulation. This proposal included an amendment to the definition of the term „securities“ to include „digital assets“ used for financial investment. It was further added that the definition of „digital assets“ as a digital „representation“ of value or rights used for financial investment.
The ISA has established multiple committees over the past several years to examine and regulate the issuance of cryptocurrencies and promote the development of digital markets in Israel. This latest committee was tasked with examining the Authority’s policy on investment products in digital assets.
The ISA seeks powers to oversee the digital asset industry, including setting requirements for issuers and intermediaries and imposing sanctions for non-compliance. The public has been invited to provide comments on the document until Feb. 12. This document seeks to establish a requirement for issuers of digital assets to publish a prospectus-like document before the summer season.
The ISA’s proposal is a significant step in the regulation of digital assets in Israel. It is an opportunity to provide clarity and structure to the digital asset industry in Israel, while also protecting investors from any associated risks. It remains to be seen how this will be received by the public and how it will ultimately shape the digital asset industry in Israel.