While several countries appear to be cracking down on ICOs, Israel’s authorities continue to emphasise an accommodating stance.
The Israeli Securities Authority (ISA) internal committee tasked with investigating cryptocurrencies, including ICOs, published its interim report on Sunday.
Tokens “Not Traditional Securities”
The primary objective of the research, which began in August last year, was to determine if, or how, Israel’s securities laws should be applied to companies issuing blockchain-based tokens.
The report distinguished between various kinds of digital currencies and recommended categorising tokens on a case-by-case basis.
In particular, it stated that tokens designed to serve solely as a means of payment or exchange, and that do not confer additional rights, should not be considered securities.
While there was some ambiguity in the wording, it implied that in many cases ICOs are not issuing securities in the traditional sense. The report also recognised the contribution that the blockchain industry could make to the world of finance and to Israel’s economy.
It went on to acknowledge that, because the sector is evolving rapidly, the committee’s recommendations could become outdated quickly.
Last week the Chairwoman of the ISA, Anat Guetta, suggested that the authority was planning to offer blockchain start-ups a regulatory ‘sandbox’ to allow them to test their ideas.
This means that, until a start-up reaches a certain critical mass, it would be able to operate in a relaxed regulatory environment. This environment would be available to all fin-tech start-ups, whether they used distributed ledgers or not.
Israel is fast becoming a major player in the global tech sector, not least because it focusses on finding ways to attract entrepreneurs and investors. Given its proactive approach to fintech and DLT regulation, it may find itself becoming a major hub for the crypto industry too.