Israel may amend its current laws to include cryptocurrency.

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By Degen Lipsa

Israel may amend its current laws to include cryptocurrency.
Israel may amend its current laws to include cryptocurrency.

Three of the Israel Securities Authority’s (ISA) current financial regulations may be changed to include cryptocurrency. The regulator’s initiatives aim to give investors the most protection possible when dealing with digital assets in an effort to raise awareness of the recent collapse of FTX and the considerable harm it brought to customers. The prospective change seeks to highlight the technological advances of the Israeli crypto industry while also providing more protection for participants.

Cryptocurrencies are a digital representation of wealth used for financial investment, according to the ISA. They can be electronically exchanged and maintained using distributed ledger technology or another technology. The regulator thinks that legalising the cryptocurrency sector might stimulate the flow of diversified capital, which would be beneficial for Israel’s economy.

Cryptocurrencies should be covered by the country’s current securities laws, according to a proposal by Israel’s financial authority.
As a result, the regulator will directly monitor activities involving bitcoin and other cryptocurrencies. The asset type will also fall under the heading of “financial instruments,” along with securities, marketing, and joint investments.

According to the plan, “These assets’ cutting-edge technology can lead to economic efficiency in many areas, reduce expenses, eliminate the need for middlemen, and optimise the way information is moved between entities.”

According to the ISA, there are now 150 companies functioning in the industry and over 200,000 Israelis are familiar with the market, making cryptocurrencies a common niche in the Mediterranean country. The plan is available for public discussion until February 12 and might become law beyond that time.

According to the ISA, global regulators failed to implement appropriate regulations on the cryptocurrency industry in 2018, which resulted in the failure of numerous businesses like FTX and Celsius Network. It further noted that Alex Mashinsky, who is of Israeli descent, is the founder of the latter. In June of last year, Celsius banned transfers, swaps, and withdrawals due to “extreme market conditions.” The corporation expressed optimism that the decision would stabilise its cash flow.

Contrarily, the issues for the former crypto juggernaut persisted, and 150 employees had to be let go in July. A week later, it submitted paperwork to enter Chapter 11 bankruptcy, and in September, CEO Mashinsky left his position. The company was almost about to finalise an acquisition agreement with FTX when the latter’s demise put an end to those intentions.

The time for customers to file claims has recently been extended by Celsius until January 10 (at least).It was one of the industry’s top companies and had 1.7 million customers at the start of last summer.Alameda Research and Pharos USD Fund SP, two of its debtors, are insolvent.

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