An Israeli Securities Authority (ISA), which is responsible for the regulation and supervision of digital assets, has suggested a framework. This was in response to the fact that more Israeli investors are becoming exposed to digital assets, and that over 150 Israeli businesses operate in Israel, according to the regulator.
The regulatory body published a proposal in January 2023 that stated its intention to respond to the risks of investing in digital assets, and give the authority the power to make regulations. Both of these goals were simultaneously achieved by the proposal.
The proposal also contains a change in the definition of securities. This would broaden its scope to digital assets that are used to make financial investments.
The authority also plans to have the ability to monitor the digital asset market. This would include rules for intermediaries and issuers, as well the imposition punishments for noncompliance.
The public was given the opportunity to comment until February 12th on the messages. It will also require issuers digital assets to publish a document analogous to a prospectus before issuing the assets.
Protecting investors is paramount. This regulation requires that digital asset intermediaries adhere to the same regulations as traditional securities industry intermediaries. These regulations require that traditional securities industry intermediaries have a license and meet capital adequacy standards.
To take full advantage of the unique characteristics of digital assets, it is important to address two areas: the potential for tokens to have different functionalities and the capability to use smart contracts.
The regulator hopes to promote the growth of Israel’s digital asset market by allowing the creation of digital asset exchanges as well as legalizing the use digital assets for collateral.
This authority was empowered to intervene in cases where it was believed wrongdoing was taking place. This helped reduce risks associated with digital assets, such as market manipulation and fraudulent activity.
This is the result of Shira, Israel’s top economist providing suggestions to lawmakers on how they should approach regulations for digital assets and how they can encourage more crypto usage.
Greenberg called for a comprehensive regulatory framework. The report, which was 109 pages in length, was presented to the Minister at the end November 2022. Greenberg claimed that such a framework would allow for standardization of trading platforms and crypto-issuers, while giving regulators more power to monitor the sector.